An open letter to Goldman's Abby Joseph Cohen:
When I heard you were appearing on Louis Rukeyser's Wall Street last week as his special guest, I watched with interest, with the outside hope that perhaps you would finally apologize for making all those grandiose market calls during the go-go years.
You know the ones, Abby -- those bold and self-assured bullish pronouncements that encouraged investors to pile into every conceivable sector and stock, helping propel the market spacecraft to the moon.
Rukeyser began his introduction of you defensively, admitting he was deluged with email, protesting having you as his featured guest. With all your market calls that helped lead the lemmings out to sea, other viewers of the show were obviously still feeling the same disgust that I was for your part in frothing up the market fervor.
If that wasn't enough, Abby, Rukeyser then proceeded to make excuses for you. He said that your poor record was the result of the unpredictable terrorist activity and corporate fraud that brought the markets to its knees over the last three years.
Rukeyser asked rhetorically, how could Abby, as "brilliant" (his description) as you may be, be expected to take all of these exogenous events into account? His point was that you didn't have a crystal ball to predict these events.
Abby, the problem with Mr. Rukeyser's defense is that your market calls came
the terrorist attacks of Sept. 11, 2001. With the wealth of knowledge at your fingertips about companies and your understanding of accounting practices, I wish you had come out and waved a red flag if you knew things were getting out of hand.
You could have simply alerted the common investor to the mutually rewarding relationship between analysts and investment banking.
That's why they pay you so much every year, right? To analyze everything you can get your hands on, interpret it, and then make judgments for your employer. Abby, while you may have done well for your employer, you failed in your duty to investors.
You could have used your stature to alert investors. At the very least, you could have told us to be careful, that the market was too frothy, that we were being set up for a major bursting of the bubble. But you didn't do it. You were just one more analyst who was part of the problem, when you could have been part of the early-warning radar.
Why not at least admit that you and other analysts exacerbated the problem? I don't have to tell you how much your profession has suffered a deserved disrepute and how poor the image of brokerage analysts has become.
In the last three years, I've never heard you say you may have been mistaken. I've never heard you say your analysis may have been overly influenced by the circumstance of the times. Why not, Abby? Why no apology?
Abby, show the investing public that at least one influential analyst has the integrity to admit that she was wrong. Then maybe some others will take your lead and follow.
I will never again take your analysis seriously. You have lost your credibility with me and with millions of other investors. Whatever analytic skills or insights you possess will never again be appreciated by those who can now see that back then, you were simply a cog in the market complex, who wouldn't speak up for the small investor.
You owe us an apology, Abby. And we're still waiting for it.
Steven J. Hendlin, Ph.D. is a clinical psychologist in Irvine, Calif. He has been in private practice for the last 26 years, investing for the last 20 years, and actively trading online as a position trader and long-term investor since 1996. At the time of publication, he was long Goldman Sachs, although positions can change at any time. He is the author of
The Disciplined Online Investor and maintains a site at www.hendlin.net. He is pleased to receive your comments and questions for publication in his public forum columns at
email@example.com , but please remember that he is unable to provide personal counseling or psychotherapy through the mail.
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