An Ode To A Bullish Wall Street

Wall Street, Oh Wall Street, will you ever learn
As the economy starts to take a turn
Stocks are one asset class we should all spurn
But before we do so, there will likely be much more churn
Then we'll witness the typical Wall Street crash and burn

Ok, that was awful. I liked the title so I had to take my shot at poetic fame. Does my work follow iambic pentameter? It looks like I'm about to get a thumb in the eye for posting this as the market appears to be headed for a big up day. It's only 9 AM, so we have to see how it unfolds. Back to the post.

A recent Bloomberg story highlighted the overwhelmingly bullish sentiment on Wall Street. Such a group consensus deserves to be recognized for its historical brilliance. As Bloomberg points out, the last time Wall Street consensus was bullish, we entered a recession and the markets fell off of a cliff. That year? 2001. In order to celebrate this year's consensus, I think it is appropriate to break out the Wall Street Opinionator commentary from those glorious days.

If you don't read Paul Farrell's commentary, you should. It's sardonic and informative. My type of journalism. I consider Paul the poor man's Alan Abelson. In other words, you don't need a Barron's paid subscription to read similar views on Wall Street gibberish. Below are quotes taken directly from Paul's write-up titled "B.S. Is Wall Street's Official Language."
If your favorite market opinionator is in the list below, you might ask for a refund. Enjoy!

March 1999: Harry S. Dent, author of The Roaring 2000s

"There has been a paradigm shift." (Translation: "This time it's different, a New Economy!")

October 1999: James Glassman, author Dow 36,000

"What is dangerous is for Americans not to be in the market. We're going to reach a point where stocks are correctly priced, and we think that's 36,000 ... It's not a bubble. Far from it. The stock market is undervalued." (Warning, don't choke on your popcorn!)

December 1999: Joseph Battipaglia, market analyst

"Some fear a burst Internet bubble, but our analysis shows that Internet companies account for only 7% of the overall Nasdaq market cap but carry expected long-term growth rates twice those of other rapidly growing segments within tech." (The Internet Index lost two-thirds in the next six months.)

December 1999: Larry Wachtel, Prudential

"Most of these stocks are reasonably priced. There's not reason for them to correct violently in the year 2000." (Fact: The Nasdaq lost 50% in 2000.)

December 1999: Ralph Acampora, Prudential Securities

"I'm not saying this is a straight line up. I'm not saying you can't have pauses. I'm saying any kind of declines, buy them!" (He also predicted a 14,000 Dow by the end of 2000 and an 11-year bull.)

February 2000: Larry Kudlow, CNBC commentator

"This correction will run its course until the middle of the year. Then things will pick up again, because not even Greenspan can stop the Internet economy." (He's still an economist, hosting his own show.)

April 2000: Myron Kandel, CNN

"The bottom line is, before the end of the year, the Nasdaq and Dow will be at new record highs." (Later in September he predicted a rally to 12,000 by election day.)

September 2000: Jim Cramer, CNBC commentator

"SUNW probably has the best near-term outlook of any company I know." (Within four months Sun Microsystems went from $60 to $30, down to $10 in a year, below $3 in two years.)

November 2000: Louis Rukeyser on CNN

"Over the next year or two [the stock market] will be higher, and I know over the next five to 10 years it will be higher." (We crashed, fell into a recession, and in two years tech lost 70%.)

December 2000: Jeffrey Applegate, Lehman strategist

"The bulk of the correction is behind us, so now is the time to be offensive, not defensive." (That's a sucker's rally.)

December 2000: Fed Chairman Alan Greenspan

"The three- to five-year earnings projections of more than a thousand analysts, though exhibiting some signs of flattening in recent months, have generally held firm. Such expectations, should they persist, bode well for continued capital deepening and sustained growth." (And the curtain opened revealing the Wonderful Wizard of Oz.!)

January 2001: Suze Orman, financial guru

"In the low 60s here, I think the QQQ, they're a buy. They may go down, but if you dollar-cost average, where you put money every single month into them, I think, in the long run, it's the way to play the Nasdaq." (The QQQ fell 60% further.)

March 2001: Maria Bartiromo, CNBC anchor

"The individual out there is actually not throwing money at things that they do not understand, and is actually using the news and using the information out there to make smart decisions." (Yes, she's serious.)

April 2001: Abby Joseph Cohen, Goldman Sachs

"The time to be nervous was a year ago. The S&P then was overvalued, it's now undervalued." (Unfortunately, the markets continued down for another 18 months).

August 2001: Lou Dobbs, CNN

"Let me make it very clear. I'm a bull, on the market, on the economy. And let me repeat, I am a bull." (Within a year the Dow and Nasdaq lost a third more).

June 2002: Larry Kudlow, CNBC

"The shock therapy of decisive war will elevate the stock market by a couple thousand points." (He also predicted the Dow would hit 35,000 by 2010.)