Paul Farrell — who seems to be getting more and outraged every day — pulls a buncha quotes from the past to hoist on their own petards the bulls of yesteryear. Before you snicker, note that many of these same characters are rising once again again in the the public media.
Its not merely that they are wrong that so infuriates Farrell; its that they have been 1) wrong so consistently 2) by facing in the same Bullish direction, and that 3) this perma-Bullish stance serves their fee driven — rather than performance based — agenda.
Bennett Goodspeed, in his book The Tao Jones Averages, had a name for this group: "The Articulate Incompetents."
Here are my favorite half dozen selections:
• October 1999: James Glassman, author Dow 36,000
"What is dangerous is for Americans not to be in the market. We’re going to reach a point where stocks are correctly priced, and we think that’s 36,000 … It’s not a bubble. Far from it. The stock market is undervalued." (Warning, don’t choke on your popcorn!)
• December 1999: Joseph Battipaglia, market analyst
"Some fear a burst Internet bubble, but our analysis shows that Internet companies account for only 7% of the overall Nasdaq market cap but carry expected long-term growth rates twice those of other rapidly growing segments within tech." (The Internet Index lost two-thirds in the next six months.)
• December 2000: Jeffrey Applegate, Lehman strategist
"The bulk of the correction is behind us, so now is the time to be offensive, not defensive." (That’s a sucker’s rally.)
• December 2000: Fed Chairman Alan Greenspan
"The three- to five-year earnings projections of more than a thousand analysts, though exhibiting some signs of flattening in recent months, have generally held firm. Such expectations, should they persist, bode well for continued capital deepening and sustained growth." (And the curtain opened revealing the Wonderful Wizard of Oz.!)
• January 2001: Suze Orman, financial guru
"In the low 60s here, I think the QQQ, they’re a buy. They may go down, but if you dollar-cost average, where you put money every single month into them, I think, in the long run, it’s the way to play the Nasdaq." (The QQQ fell 60% further.)
• April 2001: Abby Joseph Cohen, Goldman Sachs
"The time to be nervous was a year ago. The S&P then was overvalued, it’s now undervalued." (Unfortunately, the markets continued down for another 18 months).
If any of these so-called gurus had studied market history, they would have recognized how unusual the pricing of securities had become, how extended the Bull market was, and how potentially devastating any correction might be.
Forget timing the market perfectly — merely acknowledging the rapidly increasing risk would have at least sufficed.
B.S. is Wall Street’s official language
Funny how the bulls’ talking points are the same, cycle after cycle
Paul B. Farrell
MarketWatch, 5:27 PM ET Jul 3, 2006