Goldman's Cohen Sees S&P 500 Rising 14% by End-2008

Dec. 4  Goldman Sachs Group Inc.'s Chief Investment Strategist Abby Joseph Cohen forecast the Standard & Poor's 500 Index may end 2008 at 1,675, an increase of 14 percent from yesterday's close, ``as recession fears fade.''
``U.S. stocks will offer moderate gains and will dramatically outperform bonds over a 12-month horizon,'' New York-based Cohen wrote in a report today. ``Recession will likely be avoided, due to strength in exports and capital spending by corporations and governments, and thanks to a vigilant and flexible Federal Reserve.''
Cohen's 2007 forecast that the S&P 500 will end the year at 1,600 implies an 8.7 percent advance by Dec. 31. The benchmark for American equities has added 3.8 percent this year.
``Ongoing stresses'' on earnings stemming from turmoil in the financial system may be compensated by a ``competitive'' dollar, strong U.S. labor productivity and ``the favorable condition of corporate balance sheets,'' the strategist wrote.
To account for profit shortfalls in the banking industry, Cohen, 55, and her New York-based colleagues Michael Moran and Michelle Kim cut their earnings estimates for S&P 500 companies.
Per-share operating profit this year is likely to grow 0.7 percent, down from a previous estimate of 4 percent growth, they wrote in a separate report. They reduced their 2008 prediction to growth of 5.6 percent to $95 per share, from 7.5 percent to $100.
Past Calls
Cohen was known for her bullish calls during last decade's rally in U.S. stocks and was the top-ranked strategist in Institutional Investor's surveys in 1998 and 1999.
She stayed bullish on computer-related stocks for too long as the S&P 500 suffered a bear market from March 2000 to October 2002. Cohen said in October 2000 that technology shares would be a good investment in 2001. The S&P 500 Information Technology Index tumbled 26 percent that year.
Her calls on the market in 2006 were more accurate. Cohen said on June 13, 2006, that stocks had fallen too far and the S&P 500 would rebound to 1,400 by year end. The index set its low for the year that day and has since risen 20 percent.
Separately, strategists at New York-based Merrill Lynch & Co. said today that they expect European stocks to rise 9.6 percent by the end of 2008. The Dow Jones Stoxx 600 Index may end next year at 406, up from 370.36 at the end of last week, Karen Olney and Charles Cara, London-based strategists at the U.S. bank, wrote in a report.
The forecast assumes corporate profits in the region will climb about 5 percent in 2008, while the price-earnings ratio for the European benchmark will reach 13.8 at the end of the year, the note said.

把預測做得遠一些總比近一些保險。
如果S&P漲14%，美元降5%，美國的投資也不令人鼓舞。並且，如果投個股，選好行業更關鍵，像今年，銀行類股降百分之幾十，你選個好的銀行股也賺不了，少虧而已。