Bears extinct?
Year 2000 marks near extinction of overt Wall St bear
By Jennifer Westhoven
NEW YORK, Dec 17 (Reuters) - In the not-too-distant past, Wall Street firms and business television programs held slugfest debates between the market's bulls and bears, who verbally duked it out on the future of the stock market.
On the eve of the year 2000, such an event is a rare occurence.
The commentary landscape is crowded with an army of bulls, market optimists, and bereft of any bears, the pessimistic. As stocks have coursed higher through 1999, bears have been jeered to the brink of extinction.
''The only bears left are in the Bronx Zoo,'' said Bill Meehan, chief market analyst at Cantor Fitzgerald.
The market has seen gains so strong, it's left even bulls in the rear view mirror. With 1999 winding down, the Dow Jones Industrial average is up 22 percent and the Nasdaq has gained an astounding 71 percent.
More recent bears to fade from public view include Gail Dudack, chief investment strategist at Warburg Dillon Read, and Charles Clough, who left his position as Merrill Lynch's chief investment strategist for personal reason.
The two join a list of Cassandras sidelined in the late 1990's, some shoved.
David Shulman, former chief equity strategist for Salomon Brothers, moved to a hedge fund after his firm merged with Smith Barney. Michael Metz, formerly the chief stock market strategist for Oppenheimer, has seen his duties reduced to portfolio manager. And Don Hayes retired from his spot as chief investment strategist for Wheat First Union.
TELEVISION MAKES IT MORE PAINFUL
With the major stock averages racking up gains of 20 percent nearly every year for five years running, the popularity of business news shows have rocketed. That has shined an increasingly harsh spotlight on market pros who broadcast calls that in hindsight miss the mark.
Dudack was bounced from her high-profile position as one of several ''Elves'' quoted regularly on the popular telvision show ''Wall Street Week with Louis Rukeyser'' after she was consistently negative, and incorrect, on stocks.
Dudack remains in her position at Warburg Dillon Read.
The event sparked an outraged press column by Alan Abelson in the weekly Barron's and a frenzy of chatter among some of Wall Street's top analysts, already nervous about even whispering a negative word.
That was months after on-air personalities at CNBC, the popular business news cable television station, pointedly questioned the position of Ralph Acampora, Prudential's chief technical strategist, for a swift change in what had been a positive market outlook.
''Right now on CNBC, (bearish) analysts are ridiculed while they're on the show, then they ridicule them later,'' said Ricky Harrington, technical analyst and a senior vice president at Wachovia Securities in Charlotte, N.C.
A CNBC spokeswoman said the network strives to provide a balanced view of the markets, and that if analysts are razzed, it typically occurs when a stock tumbles sharply, followed by a series of analyst downgrades, after the fact.
Another analyst called CNBC's treatment of Acampora ''an absolute travesty''. The person did not wish to be named to avoid being blackballed from from appearing on the channel.
Few analysts will admit to being bearish, calling themselves ''prudent bulls'' during worry spells. A well-known analyst, after saying a ''stealth bear market'' was underway on Wall Street, screamed recently, ''Don't quote me on that! The only thing they'll hear is the word bear!''
BAD FOR BUSINESS TO BE SOUR ON THE MARKET
One analyst, echoing comments made by several insiders in Wall Street firms, said the Street could ill afford alienating the same companies it hoped to woo with costly advice about mergers or handling initial public offerings. Investment banking is one of Wall Street's biggest money makers.
''(A firm) can't come out bearish on hot groups. No IPO will come to you if you're recommending selling something in that sector,'' the person said. Like others, the person refused to be named for fear it could jeopardize his career.
The potential conflict of interest is serious enough to have caught the eye of U.S. Securities and Exchange Commission Arthur Levitt, who issued ''an early warning signal''.
Brokerage research is far too bullish, and studies point to a ''direct correlation between the content of an analyst's recommendations and the amount of business his firm does with the issuer,'' Levitt said in a recent speech.
THE FEW BEARS LEFT GROWLING
Two of the prominent bears left are Barton Biggs and Byron Wien, both of Morgan Stanley & Co. Their peers said Biggs is insulated from criticism by his witty style, and both sit among several analysts in the firm with widely differing stock market opinions. It helps that one of the most influential Internet analysts, Mary Meeker, works for Morgan Stanley, they said.
Ironically, bears counter, while the majority of stocks on the NYSE and Nasdaq have been falling during 1999, they have been proved right, even as the averages have soared.
''People who really understand what is going on in the market are being crucified as idiots,'' said Cantor Fitzgerald's Meehan. ''It's just because people are so enamored with the averages, instead of what's really happening in the market.''
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