Abby Joseph-Cohen

 

Goldman Sachs analyst Abby Joseph-Cohen has made a name for herself on optimism. She was called Permabull (permanent bull) and The Queen of The Bulls (queen of the bulls). Abby was included in the lists of the most successful women in America. Thousands of private investors trusted her every word. But after the 2007 mortgage crisis, Joseph-Cohen's career ended ingloriously.

Brilliant takeoff

Abby Joseph was born in 1952 in New York Queens. Her father, the son of Jewish immigrants from Poland, had a master's degree in finance and worked as an accountant for a publishing company. In the late sixties, he became a chief financial officer of Essence, one of the first magazines for African American women. Her mother, also a Jewish immigrant, worked as an economist at General Foods Corporation (today's Kraft Heinz). Abby was raised with her older sister and attended a regular public school. She studied well, her favorite subjects were physics and chemistry.

In 1969, Abby entered Cornell University - at that time one of the few Ivy League universities that accepted girls. Her main subjects were economics and computer science. The professor tried to dissuade Abby from studying computer science more because she was not "neither an engineer nor a man," but she ignored those admonitions.

In 1973, Abby Joseph received her bachelor's degree and adopted a double surname when she married her fellow student David Cohen. Immediately after her marriage, she moved to Washington, where she got a job as a junior economist at the Board of Governors of the Federal Reserve System and enrolled in a master's degree at George Washington University.

In 1976, Abby Joseph-Cohen received her Master's degree in Economics and accepted an invitation to an analyst position at the T. Rowe Price holding company. Little is known about her success during this period. In a late interview, the analyst spoke about discrimination at T. Rowe Price - she was denied health insurance for a long time until her husband, an employment law lawyer, achieved compliance with the law.

 

In 1983, Joseph-Cohen joined the investment bank Drexel Burnham Lambert as a portfolio strategist. Four years later, shortly before Black Monday, she was promoted to Senior Strategist. This is how Abby's first failure happened: without foreseeing the scale of the crisis, the new strategist did not have time to warn customers. Moreover, the morning after the disaster, she recommended clients to buy stocks and bonds, which, according to her calculations, were undervalued by 15%. Against the background of the bank's other problems, this mistake was not very noticeable, but since then Abby has become much more careful.

In 1990, Drexel Burnham Lambert finally went bankrupt due to the machinations of Michael Milken . After that, Joseph-Cohen worked for several months at a merchant bank Barclays, and then moved to Goldman Sachs, which she considered "the gold standard of the financial world." Here, as Senior Strategist, she pitted a confident bullish approach against massive bearish sentiment. A number of successful predictions brought the analyst not only profit but also fame. She began appearing on CNN, CNBC, and other major TV channels, and soon became an advocate for investing in a wider audience. Abby's predictions came true, she became more and more famous.

The peak of Abby Joseph-Cohen's career came in 1997, when the host of the cult Wall Street Week program, Louis Rukeyser, included her in his Hall of Fame, a rating of the best Wall Street financiers.

In 1998, Abby partnered with Goldman Sachs, a $ 5 million bank. Private investors began calling Goldman Sachs "the Abby Cohen firm."

Rapid fall

The bullish market trend predicted by Joseph-Cohen in the early nineties was abruptly interrupted by the deafening explosion of the dot-com bubble. In March 2000, the NASDAQ index fell by more than one and a half times at the close, and with it, the analyst's reputation collapsed. The Permabull nickname began to sound derisive. Newspapers competed in wits, coming up with new ones, like Miss The Turn (literally: skip the turn).

Abby seemed unfazed. “Inflation is a delusion,” she told Fortune in October 2000. - If you look at the entire economic history of the United States, over the past 20-50 years, long-term inflation has been 1.6%. We had six inflationary periods followed by deflation. <...> Every inflation in US history has been associated with a decision to finance a war. Now that that time has passed, we are back to normal inflation. "

In subsequent years, Abby's rating only declined due to her unreasonably optimistic forecasts. The last straw was the mortgage crisis. At the end of 2007, the analyst predicted that the S&P 500 index would reach 1675 over the next twelve months (at that time the indicator was equal to 1468). In 2008, the S&P 500 reached the level of 903, and on March 9, 2009, market participants remembered the ominous number of 666.

In March 2008, Abby Joseph-Cohen was fired from her position as chief analyst at Goldman Sachs, but remained with the company and led the Global Market Institute project. After her resignation, she several times gave incorrect forecasts related to the expectation of an uptrend, but they no longer had a wide resonance. In 2017, 65-year-old Abby retired.

Judging by her recent interviews, she considers it unfair to be labeled a stupid bull that stuck to her. “In 1999, right before the tech crash, I was called the most cautious strategist on Wall Street because I told people on behalf of Goldman Sachs that we were nervous. And in 2006 we said we were worried about bonds. So it is a myth that I am the eternal bull. This is not true, and I can cite many other cases when I was careful, ”says the ex-analyst.

Abby Joseph-Cohen is currently involved in community activities. Since 1997, she has served on the Board of Trustees of the Cornell Institution, Brookings Institution, and the Jewish Theological Seminary of America (JTS). In the latter, Abby was chairman of the board of directors from 2009 to 2015. She is still married to David Cohen and they have two grown daughters.