Whitney Hears the Bear's Roar

Tuesday, November 17, 2009

"I haven't been this bearish in a year...every single stock from Tiffany to Bank of America to Caterpillar is up. But there is no fundamental rooting as to why these names are up - particularly in the consumer space."

~Meredith Whitney, Meredith Whitney Advisory Group LLC

Meredith Whitney has led her clients well for 2 years now and continues to make incredibly well-timed calls on the market. While she was probably given too much credit for "calling the top" of the market in October 2007 when she suggested in a piece that Citigroup would need to cut its dividend, she still put together an impressive track record. Her willingness to stand on her own and make bearish calls puts her in a class of her own. She became more and more bearish into 2008 and stayed bearish until nearly the bottom of the market.

Within weeks of the bottom Whitney changed her posture and publicly stated that the short trade in the financials was over and profits should be taken. Not often does an analyst bother to follow up on a call as she did, and follow up so well. She then impressed further with her willingness to pay up for Goldman Sachs nearly 100 points off the low to catch the tail end of the rally. A couple months after her call to buy Goldman, she was out selling the stock on valuation concerns for somewhere around a 30% gain depending on entries.

Now, she fights the herd again with a statement like yesterday's reiterating a new bearish stance based on valuation. Her success enabled her to leave Oppenheimer and open her own advisory firm and while many falter after such drastic increases in influence, Whitney continues to prove her worth. She is a top-rate analyst with a rarely matched ability to blend quantitative factors with qualitative deductions and feel for the market action. I tip my hat to her!


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