Goldman's Abby Cohen defends her forecast record

By Herbert Lash

NEW YORK (Reuters) - Investors still hang on the words of Abby Joseph Cohen, the Goldman Sachs strategist whose staunch bullish calls in the 1990s made her a Wall Street legend, yet critics say she lost her touch a long time ago.

Cohen no longer predicts where the benchmark Standard & Poor's 500 Index .SPX will end the year -- calls that burnished her reputation in the 1990s when she held to her forecasts despite corrections that turned others bearish.

She rightly understood early in the 1990s that earnings growth would be sustained longer than past business cycles. But this decade, Wall Street almost uniformly failed to grasp the magnitude of a credit bubble that would jack up U.S. home values and spawn the worst global recession in half a century.

Critics have panned Cohen's predictions ever since the tech bubble burst in early 2000. Her profile on Wikipedia ticks off a list over the past two years of bullish calls that fell short, and says her reputation was "further damaged" when she failed to foresee the market's deep plunge late last year.

Cohen takes it in stride. Told by a reporter at the Reuters Investment Summit Outlook this week that she has erred in the past, Cohen knocked back the accusation in a calm voice that was not testy as her words might suggest.

"I would say that if you look at the record, you were wrong in terms of whether my forecasts have been wrong," she said.

Cohen, now senior investment strategist and president of Goldman's Global Markets Institute, said she feared many media rely on other media reports rather than review her record themselves.

Cohen said that in late 1999, when the bull market was still raging, she was criticized for providing a mild forecast that stocks were near fair value and were unlikely to rise notably.