Raging Bull of Wall Street Declares Himself a Bear
August 6, 1998
By SHARON R. KING
Shy and retiring, Ralph Acampora is not.
A managing director and head of technical research at
Prudential Securities, Acampora is a regular guest on
financial news television programs and a frequent
bearer of soaring market forecasts.
But even Acampora, who is known for his rapid-fire
faxes whenever the markets twitch, seemed surprised by
the market's plunge on Tuesday after he made a sudden
bearish turn.
He was branded a raging bull by forecasting in 1995
that the Dow Jones industrial average would rise above
7,000 in 1998. At the time, the blue-chip index was at
4,500, causing many to dismiss his projection as
outlandish. The Dow surpassed 7,000 in April 1997, a
year ahead of his schedule.
Last year, he upped the ante, alternately calling for
the Dow to close at 10,000 in mid-1998 or early 1999.
So when one of Wall Steet's leading bulls morphed into
a bear, people noticed.
On Tuesday, Acampora helped unleash a stock market
plunge, a 299-point decline in the Dow, by forecasting
that the blue-chip index could fall 15 percent to 20
percent from its recent high. Such a drop would push
the Dow down to about 7,470, representing an
1,868-point nose dive from its peak.
And Wednesday, the slightly balding, Bronx-born
Acampora was even busier than usual, explaining what
caused his about-face. Not surprisingly, he pointed to
Asia as the culprit, adding that President Clinton's
political problems just added to the mix.
"You are looking at a bear," Acampora said Wednesday.
"I've got to tell you, too many people listened."
A day after delivering his cautionary words on CNBC,
Acampora spent the morning at a Wall Street investment
conference. He said he expected to find stock prices
higher when he returned to his office, with the market
shrugging off his comments.
"We thought it would have some impact," he said, but "I
thought we would be up a couple hundred points."
Some other Wall Street strategists moved quickly to
counter the damage Acampora had done and to reiterate
their bullish sentiment.
In a note to clients Wednesday morning, Abby Joseph
Cohen, co-chairwoman of the investment policy committee
at Goldman, Sachs, said the recent declines were an
overreaction and that stock prices were undervalued.
Tom Galvin, chief investment officer at Donaldson,
Lufkin & Jenrette, even suggested that investors
increase their stock holdings to 75 percent of their
portfolios, from 65 percent. Galvin also forecast that
the Dow could top 10,000 within six months, while Ms.
Cohen predicted 9,300 at the end of this year.
Galvin recommended buying shares of financial, health
care, technology and retail stocks, sectors that
improved during the day.
While the Dow closed up 59.47 points, it was a
less-than-convincing rebound.
"The market didn't respond to Abby like it's done in
the past," a Wall Street investment strategist said on
the condition of anonymity.
Acampora was also unimpressed with the modest gains. "I
think we might have a couple of months of this" before
stock prices begin rising again, he said.
As a technical analyst, Acampora relies primarily on
stock charts, studying price levels, trading volume and
price movements, to forecast market movements.
Recently, he said, deteriorations in the price of Dow
stocks as well as the stocks in the Dow transportation
and utilities indexes caused him to expect steeper
declines.
Although primarily a bull, Acampora has wavered a bit
in his market calls. In June 1997, he forecast that the
Dow would hit 10,000 by June 1998. He later pushed that
back to early 1999.
There also have been a few misses. Last summer, he
called for the Dow to reach 8,750 by the end of the
year. The Dow closed at 7,908.
And in an interview last August, Acampora warned that
he might turn bearish sometime in 1998.
Acampora, 56, knows that everyone will be watching his
performance this time. "To make this statement, I
really had to believe it. This is a career call. If it
goes straight to 10,000, people are not going to be too
happy with me."
If this doesn't work, Acampora, a former seminarian,
said, "I'll be a teacher or something."
Copyright 1998 The New York Times Company |
