She didn't actually say "10% decline" but those who are facile with numbers will see some humor in the headline and those who have been at the market awhile will see some humor in the messenger.
Oh we used to have fun with Abby.
It didn't matter what was going on in the world or the markets or at the old headquarters at 85 Broad Street, when asked where the market was going, the answer was pretty much 'add twenty* percent to the current valuation'.
She seems to have scaled that back, which is a shame.
S&P 500 Jan. 13 close: 1890.28
DJIA Jan. 13 close: 16,151.41
From Bloomberg:
Goldman Sees 11% Upside in S&P 500 After an ‘Emotional’ Selloff
The plunge in U.S. stock markets are an “emotional response” obscuring expansion in both the American economy and corporate profits, said Abby Joseph Cohen, president of Goldman Sachs Group Inc.’s Global Markets Institute.
The fair value for Standard & Poor’s 500 Index is 2,100, Cohen said. The benchmark last closed above that level on December 1 and has fallen 10 percent since, after turbulence in China’s stocks and currency spurred a global market rout.
“What is happening is really very much an emotional response,” Cohen told Elliot Gotkine on Bloomberg Television. “We need to put things into perspective. Stocks are probably the best place to be.”
The S&P 500’s worst-ever start to a year sent the index down 7.5 percent in 2016, near lows seen during a rout over the summer. An index tracking volatility is on track for its biggest monthly gain since August.
With data showing the U.S. economy expanded across most of the country in the past six weeks, Cohen said she prefers stocks to bonds, echoing Goldman colleague Christian Mueller-Glissmann’s comments that investors should turn back to equities once they fall even more.*From May Day 2009's "Goldman Sachs’s Cohen Says S&P 500 May Surge to 1,050":
“The underlying performance of the U.S. economy is actually quite good ” Cohen said....MORE
Back in January I had a comment at MarketBeat:An anonymous commenter replied:
S&P estimates of $71 might be a tad high.
I’ve seen a credible case made for $45 trough EPS for this year.
So what kind of multiple do we put on that?
Why oh why won’t GS let Abby Cohen out of her undisclosed location to tell us S&P 1600 by June ‘10?
Or a reprise of her Barron’s Roundtable 2008 DJIA, 14750?
Like the old joke says:
“Two Irishmen walk out of a bar,
Hey, it COULD happen.”
Abby Cohen has one view: 20% upside. No matter where the market is.The S&P 500 opened today at 872.74. Twenty percent upside works out to 1047.29.
At least she is polite.
We have dozens of examples over the years. In January 2012 CXO Advisory updated their test of Cohen's market calls and concluded:
...Sample sizes are very small, so confidence in relative accuracies is very low. There is stronger indication (11 out of 13 years) that Abby Joseph Cohen’s forecasts tend to be too high rather than too low.
In summary, very limited evidence suggests that Abby Joseph Cohen is a little better as a stock market forecaster than her average peer, and about the same as a simple algorithm.
