Abby Joseph Cohen, chief equity strategist at Goldman Sachs, stopped by my office last week after a brief stint on CNBC. I took advantage of the opportunity and sat her down for a good, oldfashioned interview. This is a rare treat, so let’s enjoy, tongue planted firmly in cheek.
HAUKE: Abby, thank you for paying us a visit. You have climbed to the peak of Wall Street and it is an honor to speak with you.
COHEN: Well, I am sure a lot of people in Indiana want to hear what I have to say, and because I wasn’t sure how many people here know about The Wall Street Journal, I decided to come in person.
HAUKE: Great. First question. You were one of the biggest technology bulls in early 2000, and you told investors to stay in the sector, even though it went on to lose over 70 percent. How do you face yourself in the morning?
COHEN: First of all, investors need to understand that it is not my job to help them make money, but rather facilitate the sale of financial products, such as stocks and mutual funds. My firm is in the business of creating products for sale, and I do whatever I need to do to help sell those products.
HAUKE: Uh, OK. Let’s move on. I read in Barron’s in January that you recommended six stocks to investors, and by the end of June these six stocks lost an average of 8.5 percent. In only six months, that’s pitiful.
COHEN: Yes, but we had a lot of Microsoft in inventory that we needed to unload. So, my firm sold into the buying interest I created. Also, I know there is supposed to be a separation between research and investment banking, but that’s bunk. I make the chairmen of these companies happy by mentioning their names, and they send more business our way. It’s actually very lucrative.
HAUKE: If you say so. Well, Barron’s did a midyear update last month and you gave three new stock picks. Since June 14, only six weeks ago, these stocks are down an average of 21 percent. One of them, Marvell Technology, lost 30 percent in a month! You’ve outdone yourself.
COHEN: Thank you. Now you begin to see why I have such strong job security.
HAUKE: You also said last month that, according to your model, the S&P 500 should be at 1400. It’s at just 1250 now. What’s the motivation here, or are you smoking something?
COHEN: In May, we noticed that investors were getting skittish and becoming less active. We thrive on transactions, so putting an insane number out there keeps investors trading. You see, the last thing we want is for volume to dwindle and people to give up on the market. You should understand, too, that all those mergers and acquisitions don’t get done if trading dries up. We know what to do to keep the sheep in line.
HAUKE: Abby, I know how difficult it must have been for you to find us on a map, but on behalf of all the Hoosiers who need your wisdom, thank you for coming. And by all means, keep up the great work!
Hauke is the CEO of Samex Capital Advisors, a locally based money manager. Views expressed here are the writer’s. Hauke can be reached at 566-2162 or at email@example.com.