The death of Barton Biggs in mid-July serves as a reminder of how the equity market's so-called lost decade that began in 2000 has changed the role of Wall Street figures working under the job description of chief market strategist. Pronouncements from people like Biggs, Abby Joseph Cohen, Byron Wien, Elaine Garzarelli, Bob Farrell (now I'm dating myself) once commanded instant attention and widespread respect. It wasn't always easy, as others who wanted to join their ranks like Joe Granville might get hot for a year or two in the late 1970s before making spectacular fools of themselves, casting aspersions on their fellow prognosticators.
Biggs himself called market bottoms in 1974, 1982 and 2009 and wrote a piece in the early 1990s predicting that China would experience the "mother of all bull markets." When he turned sour on the emerging tech bubble in 1997, Cohen became the Pied Piper of the greatest bull market of our lifetime. To this day, Wien still pens thoughtful pieces at Blackstone.
By the late 1990s, a friend who once ran a top-ranked mutual fund told me that if he had a dime for every time Biggs was wrong he'd have more money than Bill Gates. Biggs was wrong in his timing, but not his assessment of valuations. Frustrated as the tech bubble spiraled out of control, he took some literary license and began writing about his plumber quitting his job to become a full-time day trader. When journalist Michael Lewis located his plumber, he discovered the tradesman had kept his day job. Yet in the volatile last quarter of the 20th century, Biggs and his brethren didn't fear being wrong.
Today's chief market strategist is a totally different breed. People like Schwab's Liz Ann Sonders, Raymond James' Jeff Saut, LPL Financial's Jeff Kleintop and JP Morgan's David Kelly rarely go out on shaky limbs likely to snap, even though they will occasionally make gutsy predictions. I don't know if 12 years of a sideways market (that's a generous adjective) has made them more cautious of issuing bold calls or whether they see their role as a counselor helping advisors and other investors make sense of information and process an avalanche of data.
If one is looking for dramatic outside-the-box calls, there are still folks like Jim Cramer and Euro-Pacific Capital's Peter Schiff. The latter has been harping on the U.S. debt bubble and predicted the financial crisis accurately, but many of his clients still suffered 50%-plus losses in 2008 and 2009, according to published reports. And neither is part of the mainstream.
Evan Simonoff, Editor-in-Chief
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