Cautious Tack Wins Strategist Top Ranking
Investment strategist Michael Goldstein won a lot of fans this year by refusing to go out on a limb.
The Sanford C. Bernstein & Co. strategist’s dissections of the economy and stock market stand out for their 100-plus pages of graphs, tables and charts--and lack of specific targets. Goldstein’s approach this year won him the coveted No. 1 stock-market strategist ranking from Institutional Investor magazine.
The 46-year-old analyst gained converts as he urged caution. Rivals such as Abby Joseph Cohen of Goldman Sachs and UBS Warburg’s Ed Kerschner failed to foresee the Nasdaq composite index’s tumble--61% since March 2000.
“Most of the work by other analysts is standard and repetitive,” said Robert Bloom, president of LF Capital’s New York office. “They stayed bulls and led you over the top and all the way down.”
Goldstein’s economic research resembles the jazz music he enjoys. “I like to improvise, and given the breadth of our subject matter, I get plenty of opportunity to do that,” he said. “It’s very hard, and it makes you understand your strengths and weaknesses.”
Not all of his recommendations have proved profitable.
His April 2000 report included Xerox Corp. in the “growth” and “value” model portfolios for Bernstein, a New York-based brokerage that specializes in research. Since then, the stock has declined 62% after losses, debt-rating cuts and a Securities and Exchange Commission accounting probe. Still, the same report recommended “capital goods” companies such as 3M Co., United Technologies Corp., Eaton Corp. and Deere & Co., all of which are higher today.
Goldstein has freedom his competitors lack, investors said. Bernstein doesn’t advise on mergers or take the lead in managing public offerings, so the strategist can identify stocks to buy or sell without the risk of offending corporate clients.
And unlike rivals who are more well-known among individual investors, Goldstein hasn’t been quoted in the press since at least the late 1980s, a search of newspaper and magazine articles showed.
Goldstein “loathes the media/rock star nonsense that crept into our business over the last few years,” said former colleague Steve Galbraith, now chief U.S. equity strategist at Morgan Stanley.
