Who can forget Abby Joseph Cohen?
Or rather, who can forget the cult that grew around her? We were regaled with tales not just of the Goldman Sachs strategist's steadfast bullishness, but of the details of her life.
We were told that she lives in "a nice, but unpretentious neighborhood of Queens" (
), "an area in New York City where she grew up" (
The South China Morning Post
), "fictional home of Archie Bunker, whom she resembles not at all" (Louis Rukeyser).
"She's known for her simple, sensible shoes and business suits" (
The Washington Post
), and "she eschews riding the limo which Goldman would gladly provide" (
). Instead, "the standard bearer of the bull market hops a bus early in the morning and commutes to Wall Street." (
The Wall Street Journal
With the fall in the stock market, however, the laudatory articles on Cohen have stopped. Her positive outlook on the stock market, which served investors so well in the 1990s, has been at odds with reality for the last year and a half. Last year she fell from first place to third in
annual portfolio strategist poll. This year she slipped to runner-up. The guru has left the building, and no new strategist has come by to pick up her mantle.
"Nobody listens to these guys like they did anymore," says Jim Volk, a trader at D.A. Davidson. Nor, with the pricking of the Great American Bull Market, is anyone likely to. For a whole bunch of reasons.
For one, the market just isn't as popular a pastime as it was. Stocks aren't water cooler chatter these days. Most people not only don't care what
next quarter is going to look like, they don't have the foggiest notion what Terayon even does anymore. Making good calls on the stock market these days is a bit like being Montreal Expos second baseman Jose Vidro: He hit .319 this last season, but who was watching?
The other problem is that just about everybody who's been really right lately has seemed really wrong in the past. Morgan Stanley chief investment strategist Byron Wien, J.P. Morgan strategist Doug Cliggott and Merrill Lynch chief quantitative strategist Rich Bernstein, for example, were all deeply pessimistic about the stock market when it topped out in 2000 -- but they'd all been deeply pessimistic for at least a year previous. Yes, in hindsight they were right to be bearish, but whining about excessive valuations while stocks keep going up doesn't make very good press. And none of them have the kind of pizzazz or telegenic presence that gurus in the past have had.
"You need something of an actor, not just someone who issues opinions," says Santa Clara University finance professor Meir Statman. Of our man Bernstein, he says, "Rich has been bullish and he's been bearish and has generally been right. But he has no hair!" (In an email, Bernstein replies: "Wait a minute ... what about Yul Brynner, Michael Jordan and Telly Savalas????? Who loves ya baby?")
Even if the recent rally is the beginning of a new bull market, it will take time for a guru to emerge again. Many of the strategists who are bullish now were bullish at the top. Lehman Brothers' Jeffrey Applegate, for instance, could start being right on stocks again, but investors aren't likely to forget how wrong the tech bull has been since 2000.
Yet Statman is convinced that the image of an all-knowing guru is enough of a fixture in the market's firmament that it's only a matter of time before one breaks past the horizon. Of course, when it comes to naming one, his guess is as good as
"In all times people are anxious about the market and looking for someone to show them the way. That desire has not abated," he says. "People never get the lesson -- they conclude that they chose unlucky lottery numbers last time, and next time they'll choose lucky ones."