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Strategies & Market Trends : Sharck Soup -- Ignore unavailable to you. Want to Upgrade?

To: American Spirit who wrote (33547)	8/26/2001 1:14:25 AM
From: Sharck	Read Replies (2) \| Respond to of 37746

Hey AS, Does your broker work for UBS? UBS Out on Ad Limb with Eye-Popping View NEW YORK (Reuters) - Ed Kerschner and his employer, UBS Warburg, want the investing public to be perfectly clear about the following: They are very bullish on the stock market. So bullish, in fact, that UBS Warburg has taken to running full-page ads in publications such as The New York Times, Investor's Business Daily, The Wall Street Journal, and Barron's trumpeting Kerschner's view that the ``fair value'' of the Standard & Poor's 500 Index .SPX), a broad gauge of the market, at the end of 2002 should be 50 percent above the index's level today. ADVERTISEMENT That's either a very gutsy or foolish call. The S&P 500 fell 10 percent last year and is down a further 12 percent this year. Many strategists have been forced to cut their overly bullish year-end 2001 forecasts -- or have stopped giving out these forecasts. Moreover, Kerschner's year-end 2002 prediction of 1,835 for the S&P 500 is by far the most optimistic among the Wall Street strategists surveyed by Reuters who have ventured a 2002 target. Tom Galvin of Credit Suisse First Boston is forecasting the S&P 500 will reach 1,500. CIBC World Market's Subodh Kumar recently trimmed his 12-18 month target for the S&P to 1,550 from 1,625. Doug Cliggott, strategist for J.P. Morgan Chase and last year's most accurate prognosticator, late last month cut his 2002 target to an anemic 1,200 from 1,300. Kerscher's ad runs counter to the new-found sobriety that characterizes the recent thrust of financial services advertising. These days, it's all about experience, trust and preservation of capital, instead of Kerchner's claim of eye-popping returns. The ad is running for a two-week period ending Aug. 25 at a cost ``significantly less than $1 million,'' said a UBS Warburg spokeswoman. UBS ``has used this medium in the past to reach our investors,'' she said. The UBS ad, which is based on Kerschner's July 29 strategy note entitled ``Coming Clean,'' inveighs against a gloom and doom attitude toward stocks. It states, ``extrapolating today's negative trends far into the future is a reaction of panic.'' Instead, investors should invest now because second-quarter earnings offer evidence of ``non-tech industry's ability to manage for adversity,'' according to the ad. Most non-tech firms ''are not suffering from structural overcapacity or speculative excesses'' -- and tech earnings comprise just 9 percent of S&P earnings this year. Investors should expect a rosy 2002, with U.S. economic growth of 3 to 4 percent stemming from the tax cut, aggressive Fed rate cuts, lower energy costs, and the end of the correction in inventory levels. That means stocks ``are now at extremely attractive valuation levels'' and ``should soon be benefiting'' from lower interest rates and the prospect of better earnings. Not surprisingly, the UBS ad gently reminds investors who may find Kerschner's prognosis compelling that, as it so happens, this bullish outlook is precisely what ``Financial Advisors'' from UBS Warburg's brokerage unit, UBS PaineWebber, ''are talking about with their clients.''