Veterans Granville, Stovall See More Declines; Abby Joseph Cohen Muzzled

Two related stories from Bloomberg. First, on the bearish calls by Joseph Granville and Robert Stovall. Note that each has made some spectacularly correct and equally wrong calls:

Granville, born in 1923, remembers his banker father’s bad moods following the stock-market crash of 1929. The younger Granville began his career at defunct brokerage E.F. Hutton in 1957, quit in 1963 to begin publishing a weekly newsletter and wrote nine books on investing.

“We’re in a crash,” Granville, 84, said in a telephone interview from Kansas City, Missouri, where he lives and works. “This is the worst I’ve seen, and I’ve studied every bit of history all my life.”….

Stovall, 82, started out as a junior security analyst at E.F. Hutton in 1953 and ascended to head of research. He also held the posts of research director at Nuveen Corp. and director of investment policy at Dean Witter Reynolds Inc. before founding and running his own firm for 15 years and selling it to Prudential Financial Inc. in 2000. He currently chairs the investment strategy committee at Sarasota, Florida-based Wood Asset Management, which oversees $1.6 billion.

Granville correctly forecast the bear market of 1977-78. Later, he failed to foresee the rally that started in 1982 and lasted for five years. He also called for losses in 1995 before the so-called Internet bubble began.

On March 11, 2000, a day after the Nasdaq Composite Index peaked at 5,048.62, he wrote that investors in technology stocks “will soon be burned.” The index, which now gets 42 percent of its value from computer-related shares, sank 78 percent through Oct. 9, 2002….

“With confidence at a low ebb, you wonder if this contagion will spread,” Stovall said in a telephone interview from his office. “We have to be concerned about the stability of the whole financial system.”

Perhaps I’m a cynic, but I think the timing of uberbull Abby Joseph Cohen’s change in duties is no coincidence:
Abby Joseph Cohen, among the most bullish investment strategist on Wall Street this year, will stop making Standard & Poor’s 500 Index forecasts for Goldman Sachs Group Inc.

She was succeeded in the role by David Kostin, Goldman’s U.S. investment strategist, spokesman Ed Canaday said in a telephone interview. Kostin today predicted the S&P 500 may fall 10 percent to 1,160 before rebounding to 1,380 by year’s end.

The 56-year-old Cohen now has the title “senior investment strategist” and contributor to the portfolio strategy team, according to Canaday. She was Goldman’s chief investment strategist.

“She will continue to meet with our clients around the world and provide commentary on financial markets focusing more on longer-term market activity,” Canaday said in an e-mailed statement.

Cohen, known for her bullish predictions during the 1990s, is now president of Goldman’s Global Markets Institute, which develops public policy ideas related to capital markets worldwide. As chief investment strategist, Cohen made a December prediction that the benchmark for American equities would end 2008 at 1,675.

“What I’m doing is working on a number of longer-term policy issues,” Cohen said during in an interview. “I spend half of my time traveling overseas, working with our clients on issues like environmental sensitivity, regulatory matters and accounting.”