You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
KIRK KAZANJIAN<br />
adequate quality rating, you can invest in it and reduce your risk by<br />
buying its convertible preferreds and bonds.”<br />
THE GREAT COMMUNICATOR<br />
As an investment strategist for most of his career, Stovall has long<br />
been in the public eye. Investment strategists are almost always colorful<br />
people in charge of formulating, at any given time, a firm’s re<strong>com</strong>mended<br />
portfolio weightings in stocks, bonds, and cash. Most are<br />
also ready to offer opinions about the market on a moment’s notice.<br />
Some even make specific stock picks. Regardless of their particular<br />
duties, almost every chief investment strategist also acts as the firm’s<br />
primary spokesperson. After all, when reporters need a talking head<br />
to fill in a newspaper or on TV, they usually aren’t interested in what<br />
some broker in Iowa thinks. They want to talk with the head person,<br />
the big cheese, the all-knowing seer. In other words, they seek out<br />
the hot brokerage or money management firm of the moment’s investment<br />
strategist. As a result, Stovall has been a radio and television<br />
<strong>com</strong>mentator for years and knows scores of journalists.<br />
Sadly, one look at the overall records of these gurus proves their<br />
predictions and market calls are spotty at best. As Stovall puts it,<br />
there’s a bull and a bear in every crowd, and one is ultimately proven<br />
right. It’s just impossible to know who is on the mark until after the<br />
fact. Honest Wall Street practitioners, including Stovall, admit that<br />
the market calls and asset allocation decisions made by these<br />
strategists are frequently little more than show business. It’s a way<br />
for firms to <strong>com</strong>fort clients by letting them know someone is looking<br />
out for them.<br />
A few strategists have made some great calls over the years. However,<br />
Stovall refers to most of them as entertainers, not serious market<br />
pundits. In his mind, they are always prepared with sound bites, but<br />
short on useful information. “If you follow the work of these<br />
strategists, you’ll see they write very well and are worth reading for<br />
the entertainment value,” he offers. “Nevertheless, some have been<br />
wrong for years. A chimpanzee with a dartboard is more effective<br />
than many of them. I’ve never understood how they could keep such<br />
great paying jobs by being so wrong. I recently attended a conference<br />
that our firm helped to sponsor at the Columbia School of Journalism.<br />
It was entitled ‘Wall Street and the Press: Mutual Friends or Enemies?’<br />
84
Change language