guess he was just following Abby Jo's lead - g-
from Oct, 01
The Guru ABBY JOSEPH COHEN Chief U.S. portfolio strategist, Goldman
Sachs
As the stock market soared, Abby Joseph Cohen of Goldman Sachs was
Wall Street's reigning bull, a prime mover of markets. Now that the bull
has collapsed from exhaustion, Cohen is less of a celebrity--but that
hasn't eroded her influence. "When times are confusing, it really is a
bull market for strategists," says Cohen. "It's when we're most useful."
Cohen earned her reputation as Wall Street's voice of reason by
filtering out the hype and focusing on fundamentals. She and her team
at Goldman Sachs are masters of interpreting economic and corporate
data. Even though Cohen tends to focus on big-picture trends, she also
leads last year's Ultimate Investment Club panelists in stock-picking
performance. (See our Update on page 93.)
What do the economic tea leaves tell Cohen now? The S&P 500 is
undervalued, she says, and she's glad she nudged the equity
weighting in Goldman's model portfolio up to 70% from 65% in March.
What's more, Cohen is now bullish on tech, a sector that she correctly
recommended underweighting a year ago. "The S&P 500 tech
companies are substantial and well-managed companies, with real
products, real business plans and positive earnings and cash flow, in
most cases," she says. "With the decline in share prices for these
stocks, we're very intrigued."
It's not that Cohen is forecasting a return to hypergrowth for tech. But
just as performance in late 1999 and early 2000 was "unsustainably
good," she holds that early 2001 was "unsustainably bad." Over the
long run she figures that tech can sustain a growth rate in the mid to
high teens, and "that's not priced into the stocks." If prices fall further,
she adds, that just gives investors more time to build positions. Cohen
already detects some signs of improving demand. "You see it first in
areas like computer service or software, where you don't have to work
through excess inventory," she explains. "Revenues and earnings are
looking better. We think other categories in tech will follow."
So what stocks should you buy? In tech, says Cohen, Goldman's
analysts particularly like Dell and Sun Microsystems: "There are issues
about global demand, but we think the worst is over." In energy,
Cohen favors industry leader Enron. The stock has stumbled lately, and
she now sees it as a "good value." She also singles out AOL Time
Warner (MONEY's parent) as a "content-rich global leader" in the media
business.
As for telecommunications, Cohen remains cautious. She's also cooled
on several of the sectors she favored last year, including real estate
investment trusts and most energy stocks--mainly because they've
done so well. On the other hand, she thinks there's "an excellent
long-term investment opportunity in pharmaceuticals." She
recommends Merck: "It has a great product pipeline and has been
under what we consider unwarranted price pressure." --S.W.
business2.com
I was looking at AOL. Now I think I'll pass -ggg |
