May be this will help my case.
J.P. Morgan's Cliggott hits S&P bull's-eye
By Per Jebsen
NEW YORK, Jan 18 (Reuters) - Doug Cliggott turned his back on Wall Street in 1988, leaving the fast track at top brokerage Merrill Lynch & Co. Inc. (NYSE:MER - news) for a five-year stint in Denmark so that his wife, a Dane, could return to graduate school to work on her psychology dissertation.
A decade later, he turned his back on Wall Street again.
Cliggott, now the chief U.S. equity strategist for J.P. Morgan Chase (NYSE:JPM - news), issued a bearish prediction in December 1999 for the year-end 2000 close of the Standard & Poor's 500 Index -- a prediction that differed dramatically from those of other top strategists.
``We had had five simply extraordinary years in a row, and I just thought it was old-fashioned common sense not to push the bet too far, given how wonderfully the market had treated investors,'' Cliggott said in a recent interview with Reuters. ``We thought that by the end of 1999, a lot of what was driving events was of a temporary nature.''
He was the only top strategist to venture that the broad gauge of the stock market would actually fall. His prediction of a 12 percent drop was a full 15 percent below that provided by the next-least optimistic strategist, Goldman Sachs' Abby Joseph Cohen.
By a smaller margin, Cliggott remains the most pessimistic strategist for 2001 as well, with a 1,400 year-end estimate for the S&P, up only 5 percent from current levels.
Cliggott, 44, has benefitted from each of his rebellions. He returned to Merrill Lynch, from a regional Scandinavian brokerage, in 1993 -- with two sons.
He became Wall Street's most prescient market forecaster after the S&P 500 ended 2000 at 1320, within 1.5 percent of his 1300 target. It was the market prognosticator's equivalent of a bull's-eye.
Doug Cliggott ``is a very independent thinker,'' said Ed Larsen, chief equity officer at Houston-based AIM Management, which manages about $125 billion in stocks and bonds.
``He's not worried about being in the mainstream,'' Larsen said. ``He leaned against the wind on the technology bubble, when everyone was falling all over themselves to say this was a new era.''
Cliggott urged caution at a time many investors didn't care if technology companies had earnings, and a newly public Web company could boast a market capitalization bigger than that of General Motors Corp. (NYSE:GM - news).
"[A] cautious, not aggressive, stance toward U.S. equities makes sense here,'' he wrote in a note to clients on Dec. 13, 1999.
Specifically, Cliggott warned that ``the recent run in stock prices is being driven by liquidity, not valuation.'' Investors had become euphoric because of easy money, a spectacular growth in U.S. money supply created by the U.S. Federal Reserve Bank's desire to avoid a Y2K computer bug meltdown.
Once this growth ceased, as it would soon thereafter, so would investors' optimism, he predicted.
Many individual investors smarting from the Nasdaq's 39 percent plunge in 2000 would be better off if they had heeded his words. And now Cliggott's advice is to stay on the sidelines a little longer.
Stocks should reach a bottom only by this summer, and then rebound as earnings pick up again, Cliggott wrote in a Dec. 22 note.
``Patience, and caution, will be rewarded'' because earnings news in March and April is likely to ``be very negative,'' he wrote on Tuesday.
Cliggott is ``a macro thinker, a great integrator,'' said Dr. Byron C. Yoburn, a professor of pharmacology at St. John's University and one of the Cliggotts' neighbors in Larchmont, N.Y.
Cliggott is ``clearly quantitatively oriented,'' he said.
``It always surprises me what information he brings to bear on a discussion,'' Yoburn said. ``He has a broad range of information at his disposal, and is clearly interested in a lot of different things.''
A 1978 graduate of Amherst College in Massachusetts, Cliggott joined J.P. Morgan in 1996 from Merrill. He heads a team that includes three others: Thomas C. Van Leuven, a colleague from Merrill, Ronald Q. Dottin, and Nivedita H. Patel.
Cliggott made the leap to Denmark when he was in his early 30s, because he felt that ``there was a lot more to life than just maximizing income.'' Now, though, having returned to the fold, he pays the price for his Wall Street prominence with a rigorous travel schedule that puts him ``in front of clients at least two or three days a week.''
To make up for his absences, he ``guard(s) weekends religiously,'' and aims to be out the door by 4:01 p.m. every Friday. He and his wife, Annemette, who used to work at an import-export business at the Copenhagen airport and is now a homemaker, have three children, Max, 10; Emil, 9, and Mia, 5.
In the spring, he coaches Little League baseball at Friday evening practice sessions, and Saturday and Sunday games. The Cliggotts like to ski, in New York State as well as out West at resorts such as Jackson Hole, Wyo. Their social circle includes ``a lot of Danes.''
Cliggott, who used to play tennis and golf, says he now keeps in shape by running, especially while traveling. And, every week or two, he and his neighbor Dr. Yoburn take five-mile runs together in the Westchester woods.
Cliggott remains intrigued by his job even after his recent forecasting triumph and decades of financial experience.
Case in point: Wednesday, Jan. 3. The Cliggotts are returning home from a year-end holiday in Denmark. Reading the papers at the airport in Copenhagen early that morning, Cliggott is worried because it seemed the ``markets were in some downward spiral.''
Then, just hours later, on the other side of the Atlantic Ocean, Cliggott finds his confidence restored. En route from the airport to Larchmont, he hears a radio report that the Fed has made a surprise interest rate cut that sent the Nasdaq soaring a historic 14 percent.
``Alan Greenspan decided to turn the world upside down,'' Cliggott said. |
