You can't envy Abby Joseph Cohen. She's in a terrible position that comes from having to be rigorous and bullish at the same time. She is stuck holding a target for the S&P that, if reached, doesn't do much for you over Series E savings bonds, but if she bumps it up, she will create too much hoopla and risk, taking the market to a level it currently shouldn't trade at.
In fact, given her tight ceiling and how little room there is between our heads and where she has put it, you could expect that we were going to be banging heads momentarily, unless she took some cash out of the market.
My question is, now that it has been done and it didn't cause a catastrophe, does she quietly take even more out in the coming weeks? If the only upside left is what she quantified, it is hard to believe that we should keep so much money in the stock market. It just doesn't give us big gains from here.
I don't want to get too sidetracked into Cohen's hermetically sealed world of S&P valuation and price targets. I am a stock picker. I think my stock will go up regardless of if we exceed her S&P targets or fall far short of them. I wouldn't own them if I didn't.
But Cohen works at a firm where they care, or at least say they care, about traditional methods of valuation, and under any traditional methods, Cohen has to believe the market has run out of gas, or she wouldn't begin to switch back to a more normal equity position. Cohen is smart enough to know she has to maneuver like
at these high levels in order not to precipitate a mini-crash. One wonders if she had done her equivalent of a 50-basis-point hike -- a 10% cut in equities -- whether the
Nazzdog would have been clipped for 5% in a day!
So far, she has skirted the lines between rigor and promotion as about as well as I have ever seen. Contrast her with
Morgan Stanley Dean Witter's
Byron Wien, who offers a totally rigorous view of valuation, which makes him so he simply can't be bullish as much as he might want to be. He can't promote at these levels, so he doesn't. But if the market doesn't have its correction, Wien loses some effectiveness, while Cohen can continue to play bull.
Maybe the position of equity strategist -- any strategist -- is one that is just too hard to play in this crazy market. To have to have tenets is to outmode yourself. To have to have rigor is to doom yourself to the sidelines.
Man, I don't envy any of these folks. Not at all.
I am getting excited about whom you voted to be the best online broker. With 10,000 people participating, I guess you could say this survey has a little more clout than those that polled 200 or 300 people. ... If you don't read
Night Owl stuff, you are missing a real hoot. ...
has settled into a predictable rhythm and voice that I have come to love as a way to
wrap up my day, in the same way I used to use Serwer before Andy decided to be a young Andy Rooney. ... Still betting with
case. He has the downside-upside equations spelled out perfectly. ...
Matt "Wireless" Jacobs
is very juiced about
, as am I.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Microsoft and AT&T. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at