Ran across charts on all major indexes,,, as well as bell weather stocks and leading technology stocks,, exception of lead internet stocks ,, charts have a strange dejavu ,, of July and Oct about them ,,
I believe,, we will see great bargains again very soon ,, I.E., KO at 53 again ?
C under 45 ? ..
LEH PWJ LEH JPM etc ,,
Yes let us have another run of August and October ..
Be conservative,, we only need very few of these fundies and 4 or 5 over night sensation of 10 points or more ,, like CMGI GERN ONSL DBCC and XMCM ,,,
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Wall Street Veteran Avoids Market Darlings: Taking Stock
New York, Jan. 22 (Bloomberg) -- Money manager Seth Glickenhaus, 84, stared at a computer monitor in his midtown Manhattan office with eyes wide open, watching numbers flicker as if engrossed in a movie.
Glickenhaus, who held the U.S. record for 10-year performance as a money manager a couple of years back, was fixated on a recent November afternoon on Potash Corp. of Saskatchewan. The Canadian fertilizer company had lost about a third of its market value since the beginning of 1998 amid a worldwide slump in fertilizer demand. The stampede out of the stock piqued his interest. He was buying.
''This is the largest fertilizer company in the world,'' said Glickenhaus, who runs the money management firm Glickenhaus & Co. ''After all, people are still going to eat. Follow me? Our farmers have a great lobby. You understand? This whole business is common sense.''
Some practical-minded investors might be tempted to dismiss the common sense of this trim, affable six-footer. Last year, as Yahoo! Inc. and other high-priced Internet stocks rose sixfold and computer companies such as Microsoft Corp. doubled, Glickenhaus stuck with less expensive ''value'' stocks and lost money.
His investors' accounts fell about 2 percent on average. He had big bets in oil drilling shares -- which plunged along with oil prices -- and real estate investment trusts, which fell amid concern about a slowing economy. Meanwhile, the Standard & Poor's 500 Index, a broad market benchmark many money managers are measured against, advanced 27 percent.
His Worst Year
Relative to the S&P 500, it was the worst year ever for Glickenhaus. ''Sure, it was frustrating,'' Glickenhaus said, sitting in the East 43rd Street office of Glickenhaus & Co., which manages about $5 billion for wealthy people, pension funds and nonprofit groups. ''But people who buy stocks are too interested in how much money they'll make. That's stupid. It's risk-reward we look at.''
In buying shares of companies he deems inexpensive, Glickenhaus practices what's known as ''value investing.'' ''Value'' managers struggled in recent years relative to ''growth'' managers, who buy companies that have faster-than- average earnings growth and tend to trade at higher price- earnings multiples.
Risk and reward have taken on greater relevance in the past two weeks as Internet stocks such as Yahoo! and Amazon.com Inc. lost one-third to half of their market value. For his experience and record, Glickenhaus is still held in high regard. In the 10 years ended Dec. 31, 1996, the firm was the top money manager in the country, returning 523 percent for its average investor, according to CDA Investment Technologies.
''One of these years Seth will be up 50 percent,'' said Robert Morris, director of equity investments at mutual fund company Lord Abbett & Co. ''When the consensus changes he'll look great. That's the nature of what he does.''
Buying Size
What Glickenhaus has done for decades is buy shares of companies for which expectations and price-earnings ratios are low, which have strong balance sheets and managers Glickenhaus admires. ''He diversifies very little,'' said Roy Neuberger, 95, a founder of the money management firm Neuberger & Berman and a Glickenhaus friend. ''He identifies a bargain and buys a large quantity.''
Glickenhaus has big bets in financial giants Citigroup Inc., Merrill Lynch & Co. and mortgage lender Countrywide Credit Industries Inc.; automakers Ford Motor Co. and DaimlerChrysler AG; building materials manufacturer USG Corp.; oil drillers Global Marine Inc. and R&B Falcon Corp.; semiconductor makers Micron Technology Inc. and Altera Corp.; and others.
Conspicuously missing are such high-profile growth stalwarts as Pfizer Inc. and computer companies Microsoft and Dell Computer Corp. -- which have led the market higher. Glickenhaus is blunt about why he excludes them.
''We feel if you have Dell or Microsoft, you're paying a bitch of a (price-earnings) multiple if something goes wrong,'' Glickenhaus said. ''If there's a problem, the price would go down and the multiple would go down. You get a double hit. But if I'm wrong about USG, it won't go down very much.''
'Momentum Market'
Microsoft trades at 61 times its estimated 1999 earnings, according to First Call Corp. USG trades at eight times 1999 earnings.
The Standard & Poor's Barra Value Index, which tracks stocks with relatively low price-book multiples, returned just 14.5 percent in 1998, about half the return of the overall Standard & Poor's 500 Index. Small and mid-size stocks, also Glickenhaus specialties, finished the year in the red.
''It's a momentum market, where people tend to buy what's working, not what's cheap,'' said Byron Wien, director of investment strategy at Morgan Stanley Dean Witter & Co.
For better or worse, Glickenhaus hasn't wavered. He said his strategy comes in part from experience. His first Wall Street job was as a summer messenger for Salomon Brothers in 1929. On Oct. 29, two months after he left to enroll as a freshman at Harvard University, the market crashed. The Dow Jones Industrial Average plummeted 12.8 percent.
Training at Salomon
After college he returned to Salomon as a trainee and became a municipal bond trader. In 1938, he was hired by a municipal bond brokerage that evolved into an investment advisory firm. During World War II he served in Army intelligence, then returned to the investment business after the war, briefly retired to go to medical school, and unretired in 1961 to start Glickenhaus & Co. He weathered the bear market of 1973 and the crash of 1987.
Glickenhaus trades frequently. After a quick run-up in a stock he usually takes profits. And he seldom buys a stock unless it's down from its high. The firm doesn't limit itself to any industry group. ''It depends on what's cheap and what isn't,'' he said. Thirteen Glickenhaus & Co. analysts and money managers select the stocks.
Economists have been mystified by the U.S. economy, in the midst of an eight-year peacetime expansion, the longest ever. Glickenhaus, for one, saw it coming. For more than a decade, he's argued that a stinging recession is unlikely in the U.S., because the economy has grown so diverse and large it has reduced the amplitude of the business cycle.
''When one area does poorly, another one does well,'' he said recently by way of explanation. ''They offset each other to some degree.''
Prescient 1998 Call
And while he has been surprised by the surge in market averages since 1995, he got it right last year. As world markets tumbled he said he was a buyer, particularly of financial shares such as Merrill Lynch. ''The public is inevitably wrong,'' he told Bloomberg Sept. 23. ''They get optimistic at the wrong time, and frightened at the wrong time. The U.S. market is not in bad shape.''
Since the interview the Standard & Poor's 500 rallied 16 percent and Merrill's up 27 percent.
Arguably, Glickenhaus's contrariness has been a liability. By avoiding the market's largest growth companies, he has missed out on its best performers. The firm also accumulated cash in some portfolios, hurting relative performance. He counters that the market's out of step, not him.
''Investors are putting their money into name stocks,'' he said. ''The average investor doesn't buy USG. He buys General Electric. The intelligence of the United States goes down every year. Schools keep deteriorating. With the dumbing down of America, you're getting more and more aberrations in the market.''
Succession
His son, James, 48, has inherited the Glickenhaus aversion to Internet stocks such as Yahoo. ''When they crash, it will be like car keys falling out of a Lear jet,'' James Glickenhaus, who is a partner in his father's business, said back in November.
James joined the firm full time in 1997 after a career writing, producing and directing independent films in Los Angeles. Seth Glickenhaus said his son is his likely successor, although he insists he won't retire until he turns 125.
Seth Glickenhaus said he's worried about the nation. He regards Americans as increasingly apathetic and politicians as increasingly incompetent. ''You saw the implosion in the USSR? I think there will be a similar one here.''
Yet he's optimistic about the business. 1999 is already shaping up as a better year than 1998, he said. Many of his companies, including the oil drillers, are rallying. Potash is up about 22 percent since the firm started accumulating it in September.
09:52:53 01/22/1999
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