Abby Joseph Cohen Sees Fair Value for the S&P 500 at 1,150 at the End of ’09

By on December 22, 2008

Last week on CNBC’s Squawk Financial Summit, Abby Joseph Cohen, Goldman Sachs Senior Investment Strategist said she saw S&P 500 earnings at $55 for 2009 using a very cautious economic forecast. Ms. Cohen believed fair value for the S&P 500 at the end of 2009 would be 1,150, but cautioned, “don’t hold me to the precision.”

On the same show, John Bogle pointed out that last year the 12 featured senior market strategists of major investment banking firms in Barrons averaged a 1,650 estimate for the S&P 500 and uniformly predicted $100 earnings for the end of 2008. Mr. Bogle wisely commented that forecasting is a “dangerous game,” given that earnings have dropped by 1/2 and the index is currently around 900.

At the beginning of 2008, Ms. Cohen predicted the benchmark for American equities would end 2008 at 1,675, representing a 32 percent rally from its level at that time.


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