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Mr.
Joe Battipaglia (6/30/01)
Well,
ladies and gentlemen, it's that time of year again, time for Dr. Stool's mid year nomination for the Blodgett-Meeker
Award (aka BM Prize) for market strategist of the year. To mark
the occasion, Dr. Stool has chosen, from among all the statements made
by these funny guys and gals, the one which he feels epitomizes the
depth of comprehension, analytical acumen, and wisdom of Wall Street's
most admired spokespersons. And the winner is:
I
expect to hear from a "kinder, more gentile" Federal
Reserve board when it meets to discuss the future of monetary policy.
-Joe
Battipaglia, CBS.MarketHype, 12/4/00
Perhaps
Mr. Battipaglia was expecting Chairman Greenspew to resign, thereby
making the Fed "more gentile". By the way, the quotation
marks were Mr. Battipaglia's, not Dr. Stool's. In fact Mr. Battipaglia
did go on to forecast, are you ready, two 1/4 point cuts in interest
rates by mid year of 2001. Congratulations Joe, at least you got the
direction right.
It
was about the only thing.
OK,
not quite.
Now
it is not Dr. Stool's intention to make fun of Mr. Battipaglia.
Dr. Stool promises no more name calling. He has
made enough snide remarks about Mr. Battipaglia these last few months.
From this point on Dr. Stool will just present the facts, in
recognition of this most austerious of occasions. Dr. Stool in no way
wishes to diminutiate the seriosity of the nominatorius process for
the BM Prize. No more Joey Buttafuocopaglia, no more Joey Brattipaglia,
Brassiballsia, or Joey Brass Balls, or just plain Fat Head. It's
undignified and beneath Dr. Stool to resort to such tactics. Mr.
Battipaglia is after all, a professional, and he makes a shitload more
money than Dr. Stool, so we must treat him with respect. Beside which,
Dr. Stool just learned that Mr. Battipaglia is 6' 8" and weighs
285 pounds. No sir, from now on it's Mr. Battipaglia, sir!
So
lets get on with the facts. In order to be eligible for the BM Prize,
the analyst must have exhibited an unusually high level of analytical
acumen and integrity for the period from 6-12 months prior. This is
because their forecasts tend to be for 6-12 months. So Dr. Stool uses
the same time horizon.
We'll
start with a few quotes from Mr. Battipaglia's CBS.Markethype Column.
This is fun reading. So button up your Depends,
and don't hold back. The totality of this is simply stunning.
7/10/00-growth in corporate earnings will once
again become the primary catalyst for lifting equity values. In this regard, I
expect the higher earnings growth profile of the Nasdaq composite to deliver the
best performance and provide leadership for the broader market.
7/17/00-The strongest growth category should
remain technology with year-over-year gains in excess of 30 percent.
Fundamental conditions are such that profits
for the second half and next year have the potential to remain well above the
historic trend line.
I recommend that growth investors remain fully
invested at this time. I am making no change in my year-end index targets
of 12,500 on the Dow Jones Industrial Average, 1,650 on the S&P 500, and
5,500 on the Nasdaq composite index.
7/31/01-investor focus should to give way to
greater investor enthusiasm as the potential for an extended profit cycle well
into 2001.
8/21/00-Again, the fundamental conditions for a
continued bull market remain very much intact
8/28/00-The next catalyst for higher equity
prices should be strong earnings growth in the second half and the potential for
an extended profit cycle well into 2001.
10/11/00-it is unlikely that the NASDAQ
composite will reach my year-end target of 5,500. Therefore, I am reinstating my
originally forecast target of 4,300 for the NASDAQ composite index by year-end.
I am leaving my S&P 500 and Dow targets at
1,625 and 12,500, respectively....analysts and investors will become
increasingly comfortable with forecasts for top line growth, profitability and
improving backlogs.
I see no significant threat to the ongoing
expansion of the U.S. or global economies.
the balance sheets of households, government
and corporations continue to show improvement as assets and income rise relative
to obligations. At the same time, years of increased investment spending by
corporations will have long lasting effects in raising productive capacity,
efficiency and long run profitability for most companies.
10/23/00-My initial estimate of next years
profit growth is for a 14 percent improvement in S&P 500 operating earnings
over this year's....should help support rising equity prices.
I believe that the worst of the correction is
now behind us and remain committed to my year-end targets of 4,300 on the NASDAQ
composite, 1,625 on the S&P 500 and 12,500 on the Dow Jones Industrial
Average.
10/30/00-Having reviewed the third quarter
data, I am maintaining my 3 to 3 1/4 percent growth assumption for the U.S.
economy in 2001 based on continued growth in consumption, rising investment
spending by business, improved export business and growth overseas.
My earnings forecast remains for 14 percent
growth in S&P 500 operating profits next year. I remain over-weighted in the
following sectors: pharmaceuticals, financials, communication services and
equipment, technology, and consumer cyclicals. I am making no adjustments to any
index targets at this time. My year-end index targets remain 12,500 on the Dow
Jones Industrial Average, 1,625 on the S&P 500, and 4,300 on the NASDAQ
composite.
11/6/00-my forecast remains for relatively
strong growth of 14 percent in operating earnings - somewhat higher than the
annualized growth rate of the 1990's.
My year-end index targets remain 4,300 on the
NASDAQ composite, 12,500 on the Dow Jones Industrial Average, and 1,625 on the
S&P 500.
11/13/00-PC manufacturers are the most recent
victims of these worries as competitive forces and margin pressures take their
toll. This, however, is not indicative of an end to the spending cycle for
technology.
11/20/00-Once the election decision is in
place, the positive fundamentals will once again take center stage for
investors.
12/4/00- I believe that the Federal Reserve
will lower rates in the coming months as they did in 1995. One, perhaps two, 1/4
point rate cuts likely by the end of the first half of 2001
The environment for equity investors is
favorable in light of lowered expectations on earnings that can easily be
exceeded and my forecast for credit easing by the Federal Reserve. Valuations
also have become more attractive when measured relative to their forward price
to earnings ratios.
Accordingly, I am initiating my 2001 year-end
price targets on the various indices as follows:
Dow Jones Industrial Average - 12,700
S&P 500 - 1,650
NASDAQ composite - 4,300
I
expect to hear from a "kinder, more gentile" Federal Reserve
board when it meets to discuss the future of monetary policy
12/11/00-With multiples already compressed in
many cases, I expect to see better relative performance by technology companies
in the weeks and months ahead as tired expectations are re-energized by
surprisingly good results
12/18/00- By the end of the second quarter,
most inventories have been adjusted and earnings expectations will be easily
beat since today's expectations are extremely bearish. 2001 should be yet
another year of record earnings for most companies
My year-end 2001 price targets are 12,700 for
the Dow Jones Industrial Average, 1,650 for the S&P 500 and 4,300 for the
NASDAQ composite.
1/2/01-As investment in technology grows in
terms of its contribution to the overall economy, I expect to see continued
gains in the noncyclical component of the productivity data.
My own estimate for earnings growth still calls
for a 14 percent year-over-year improvement in S&P 500 operating earnings
for 2001.
Accordingly, I am raising my sector rating on
transportation companies from "neutral" to "outperform" at
this time.
As demand for U.S. made products rises, our
trade and current account deficits should ease. Also, rising exports should be
additive to overall GDP growth.
Look for 2001 to be a year of positive
surprises. We are adding transportation companies to our
"outperform"-rated sectors, alongside financials pharmaceuticals, and
technology. Our 2001 year-end targets remain 12,700 on the Dow 1,625 on
the S&P 500 and 4,300 on the Nasdaq
Perhaps
Mr. Battipaglia's problem is that he doesn't know when to shut up. The technical
term is shitferbrains and diarrhea of the mouth. Mr. Battipaglia made 44 media appearances in the
second half of 2000, making 128 recommendations. One was actually a sell.
He
recommended the sale of Philip Morris on September 7, 2000. The stock was
$44.13. As of June 29, 2001 the closing price was $50.75, a gain of 15% in
10 months. You also would have missed a couple of nice fat juicy
dividends. So he even got his one "sell" call wrong.
Dr.
Stool's review included only recommendations Mr. Battipaglia made
publicly which were reported in the financial media. Dr. Stool compiled
a record of these recommendations. The record included only unhedged statements. Where the statement was hedged or unclear, it
is not included. The following table lists the recommendations alphabetically by
stock symbol, showing the date, closing price, current price, and percent gain or loss. Multiple recommendations
of the same stock are included, except where
they were made on the same day.
To
save you the trouble of scrolling through the whole list, here's a summary.
Mr. Battipaglia made 127 recommendations in 44 media appearances from
July 7 through December 22, 2000. 28 were profitable. 99 were unprofitable.
The average overall loss was 22.6%, including all the winners. The SPX
lost 17% over the same time span. The average holding period from the
date of recommendation until 6/29/01 was 9.5 months. The annualized
average return is -28.2%.
Congratulations,
Mr. Battipaglia, on your nomination for the BM
Prize.
Mother
Superior Down 25.6% in 7 Months Dr. Stool has updated this
article, first published in March, to reflect current performance.
Looks like she's still worse than Joe.
