Gem of the the day from Abby Cohen Joseph-Goldman Sachs.
Scott:
Thanks for that link to news about Abby's comments,allow me to highlights some the points she made.Funny how everybody has ignored her but those who listened would be amply rewarded I am sure.
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Friday August 28, 4:30 pm Eastern Time
Goldman's Cohen - a bullish voice from the rubble
NEW YORK, Aug 28 (Reuters) - Goldman Sachs & Co. U.S. stock strategist Abby Joseph Cohen said on Friday that she stands by her bullish targets for U.S. stocks even as they shrink further and further away from them.
In a note to clients on the day after the Dow fell 357 points or 4.1 percent, Cohen said the recent sharp declines in U.S. stocks are mostly due to a shift in sentiment, not in fundamentals.
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She said stocks are now seven to ten percent undervalued and said her year-end 1998 price targets are unchanged: putting the S&P 500 at 1150, the Dow Jones industrial average at 9300, and the Nasdaq Composite at 1850.
''FUDD around the world,'' her note was titled, laying the blame for the recent disaster which has left stock markets weakened at the feet of ''Fear, Uncertainty, Doubt and Despair'' surrounding the wrenching turmoil in Russia.
Cohen said the current situation is similar to October 1997, when stocks were knocked down sharply as Wall Street began grappling with the Asian financial crisis. Risk premia for financial assets, especially in emerging economies, is widening now just as it did last year when the first fallout of the Asian financial crisis was felt, she said.
At the end of October 1997, Goldman estimates that U.S. stocks were undervalued by 12 to 15 percent.
''Stock prices as measured by major market indices rose substantially, some 25 percent to 30 percent in the subsequent six months,'' she said in a report.
Cohen said although problems in Russia are of great consequence to Russia and eastern Europe, they have minimaldirect economic consequences for the U.S. because less than a percent of U.S. exports go to Russia; most U.S. banks have little exposure to Russia.
Even worries about economic tremors in Latin America seem ''out of proportion'' to the slide on Wall Street, she said.
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Cohen, who is fond of analogies, said her ''Supertanker America'' theory still holds. ''(It) is capable of navigating through difficult global seas. We had expected some localized tropical storms in the global economy in 1998 and had forecast a deceleration in U.S. profit growth as a result,'' she said.
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Her comments, coming from one of Wall Street's most esteemed forecasters, were often cited as a factor that helped turn the market higher during rare doses of uncertainty.
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