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By Mike Caggeso
Bullish Goldman Sachs Group Inc. (GS) strategist Abby Joseph Cohen, 56 – famous for being one of the first to predict the 1990s bull market – has been replaced as the bank’s chief forecaster.
Cohen stepped down from her post but remains on Goldman’s investment strategy team, becoming senior investment strategist and president of Goldman's Global Markets Institute, The Wall Street Journal reported.
Replacing her is David Kostin, 44, a four-year veteran of Goldman’s U.S. Portfolio strategy team. Cohen said she picked him to lead the U.S. portfolio strategy team because of his “astute company analysis” and “macroeconomic understanding,” Bloomberg reported.
He boldly started his new job by predicting that the S&P 500 would fall 10% to 1,160 in the near term and finish the year near 1,380. He also said that investors should expect companies to cut earnings forecasts and report lower profits, Bloomberg reported.
“The consumer is more constrained today than ever before,” Kostin wrote in a research report Monday. Lower earnings industry-wide “will be the catalyst to drive the market lower.”
That’s certainly a major shift from Cohen, who in December predicted the S&P 500 would reach 1,675 in 2008. However, in her WSJ interview, she agreed with Kostin’s forecast.
Cohen’s career began at the Federal Reserve Board, where she served as an economist from 1973 to 1977. From there, she worked as a research director and economist for T. Rowe Price Associates (TROW).
From 1983 until 1988, Cohen served as vice president in charge of investment strategy at Drexel Burnham Lambert Inc.
She joined Goldman as a vice president and co-chair of the Investment Policy Committee in 1990, and was promoted to managing director in 1996.
“One thing I made clear internally was that I wanted to start working on longer-term issues and didn't want to do the day-to-day market analysis,” Cohen told the Wall Street Journal.
In 2005, she was ranked 19th on Forbes Most Powerful Women list – ahead of Mary McAleese, president of Ireland (No. 21), Ruth Bader Ginsberg, U.S. Supreme Justice, (No. 23) Sen. Hillary Clinton (No. 26) and , (No. 28) then-President now Chairperson of the Board/Chief Executive Officer of PepsiCo., Inc. (PEP) – because her bullish reports and frequent television commentaries often moved the market upward.
News and Related Story Links:
- Wall Street Journal: Goldman Replaces Cohen as Forecaster
- Bloomberg: Goldman's Cohen Replaced as Chief S&P 500 Forecaster
- Wikipedia: Abby Joseph Cohen