She's got it made

Abby Cohen lives in Queens and goes to work on the bus, but she's the Wonderwoman of Wall Street. DAVID USBORNE reports

Every weekday morning at about 6.45 am, this New York native walks from her modest home in a nice, but unpretentious neighbourhood of Queens to her nearest bus stop. There she waits for her ride into lower Manhattan. She looks like any other middle-aged mum - she has two teenage daughters - holding down a job in the city. In her business suit and sensible shoes, she could be a teacher or maybe a lawyer.

Her destination is 85 Broad Street in Manhattan's financial district. It is a modern, entirely bland office tower, just around the corner from the New York Stock Exchange. There are no corporate logos or brass plaques and you are none the wiser about either her identity or what she does for a living. What you may notice is that almost everyone else is arriving by black limousine. Whatever this place is, this lady, with her open face and dowdy brown hair, obviously does not count for very much.

Wrong! The building is the World Headquarters of Goldman Sachs, the insanely prosperous investment bank that gives financial advice to governments and corporations. It made headlines just last week when it unveiled plans to go public by selling shares in itself later this spring. (Even its lowliest janitor stands to reap a one-off windfall of $10,000 from the long-awaited offering.) Moreover, the lady in question is none other than Abby Joseph Cohen, more popularly known as the "Prophet of Wall Street".

Ms Cohen, 47, who could surely own an estate in Greenwich, Connecticut, but likes it better in Queens where she grew up and where her widowed father still lives, has for seven years served as chief US markets strategist for Goldman Sachs. It is a mostly technical, number-crunching, sort of job. She works very long hours - at Broad Street, Monday to Friday, when she is not circling the globe to speak with customers, and at home all day Sunday - poring over statistics and graphs and pages of analysis. Her mission is simple: trying to predict what is around the corner for the US economy and the stock market.

And yet, she has achieved something very unlikely. Celebrity. She is famous not just among her peers on Wall Street and the clients she serves, but on America's Main Street also. It is a reputation that is doubtless earned by straightforward hard work. Above all, however, she is identified as the one strategist who, since 1992, has relentlessly assured investors that the US economy is in fabulous shape and that the stock market, therefore, would, in the medium term, continue its remarkable ascent. Abby Cohen has not only been a Wall Street bull, she has been the bull at the head of the seven-year stampede of bulls.

Her rise has been remarkable if only because of where she works - Goldman Sachs is famous for its phobia of publicity (something it will have to overcome as it prepares to go public). But also there is her down-to-earth personality, which friends and colleagues insist is genuine. The commuting by bus is no stunt or eccentric pose. Her favourite food is yoghurt and she professes to enjoy doing the laundry. "She is just a regular person," remarks one fund manager who is an important client. "She comes in and it's not this big ego thing. Where she is at, you might expect her to come into our conference room and, you know, give us attitude. That's not her." He recalls the day she came to his firm last September when trouble in Russia and Southeast Asia had sent the Dow Jones Index into what turned out to be only a temporary slump. "She was a voice of reason in a sea of panic." At the time, Cohen was actually advising clients to increase their exposure to stocks over other investments.

Linda Strumpf, who is an old friend and, as chief investment officer at the Ford Foundation, a client, similarly paints the picture of a person quite unaffected by her fame, or indeed, her wealth. "Abby has always been well-grounded. There are men in this business who reach 45 or 50 and don't know their wives or children any more. Abby has always maintained balance".

Cohen, whose two daughters are 12 and 18, was elevated to the vaunted position of a partner in Goldman last October. Thus she became a member of a most select club that attracts envy and awe across the financial firmament. Even the most junior partners at the bank can expect to take home $6 million a year. The public offering that is now just around the corner means the partnership will in fact be dissolved. But those with the title will pocket eye-popping rewards. Even the most junior partners, Cohen among them, can expect their shareholdings to be valued at $20 million when the sale is completed. In other words, come the summer, Ms Cohen will be able to buy the bus she rides to work in. Or indeed the fleet.

More important to understand is Cohen's stature. In an era where buying and selling shares has replaced baseball as America's national pastime, Cohen has become the muse of the markets. She is the oracle, whose words are gleaned as priceless pearls even by the most modest of investors. When she appears on television to ponder on what lies ahead, America tunes in. The love that is extended to her may, of course, be related to her relentlessly upbeat message. Since February 1991, when the Dow Jones industrial average bottomed out at 2,365, she has done nothing but offer investors happy news. Even when the Dow itself has treated us to one of its occasional swoons, Cohen has not flinched. Such is her influence, moreover, she has more than once been credited with single-handedly turning a declining market around. It happened during the Dow's Russia-related wobble last August. A colleague at a rival bank, who had previously been a bull like her, jumped suddenly to the bears. The Dow slumped 300 points. Cohen was on holiday in Israel. The following day she faxed a riposte back to New York. It said that the US was still enjoying what she had already dubbed the "supertanker" economy. There would be the occasional tumult of the oceans, but the vessel would sail steadily on. The Dow recovered instantly. When one financial channel on television reported her words, it simply flashed "Abby" on the bottom of the screen. No other identification was necessary - neither Cohen, nor Goldman Sachs. Cohen herself insists her influence should not be overstated. "The market moves on fundamentals, not on what any one strategist says," she insisted to Fortune magazine a few weeks after that event.

It was a show of modesty, however, that Fortune, at least, chose to disregard. Recently, it ranked her number 9 in its pantheon of America's 50 most powerful women in America. Not bad for the daughter of professional Polish immigrants who settled in a middle-class neighbourhood of Queens. Always an academic high-flyer, Abby studied economics and science at Cornell, the only Ivy League university that took women in her youth. There she met David Cohen, now a director of personnel relations at Columbia University, whom she later married. The pair moved to Washington, where Abby took an MA course and worked part-time at the Federal Reserve Bank. She was just 31, when, after she had already worked for a few years with a Baltimore brokerage firm, in her words, she succumbed to the "siren song of Wall Street". It was only bad luck that her new home was Drexel Burnham Lambert, the bank that was liquidated in early 1990 after disgrace was brought upon it by another of its former employees, the junk bond pioneer - and convicted financial fraudster - Michael Milken. From there, she passed briefly through the New York office of Britain's Barclay's de Zoete Wedd (BZW), before finding herself as strategist at Goldman Sachs.

It was a startling achievement by any measure. She was barely known and, of course, she was a woman in a world where power and prestige resided still almost exclusively with men. Tom Wolfe gave us the phrase "Masters of the Universe". He made no mention of "Mistresses of the Universe". (Let's not even attempt any gender variation for his other epithet for the warriors of Wall Street - the "big swinging dicks".) Wall Street is no longer all cigars and braces. Even Goldman offers daycare for employees' children. Last week, two other female partners were promoted to its highly prestigious management committee. What a change since the old days as described in a book just published in the US. Called Goldman Sachs - The Culture of Success, it was written by one of its former vice-presidents, Lisa Endlich. She relates how one recruiter once asked female students at a university in California applying to the bank if they would advise friends who became pregnant to have an abortion for the sake of the business. No one argued with Goldman's decision last year to give Cohen her partnership. "All her clients were delighted," says another admiring fund manager. "They knew she deserved a stroke." It is not just the humility that seems to endear Cohen to her colleagues. It is also her ability to translate her analysis of the economy into plain English and her relative consistency. "She is a long-term thinker who doesn't change her mind every six weeks," says Strumpf, who looks after $11 billion for the Ford Foundation. "A lot of strategists will be bullish for a while, then change their mind suddenly and try to take you out of the market."

She has her detractors, however. "Abby is a nice person but her reputation for walking on water is overdone," Laszlo Birinyi of Birinyi Associates commented recently.

This week, however, doubters were silenced, at least temporarily. On Tuesday, just 20 minutes before trading opened, the Dow Jones industrial average punched through the 10,000 barrier for the first time - an achievement that just two years ago would have seemed outlandish. Cohen refrained from delivering any I-told-you-so's, but she came close. "The bull market is not over," she said. "Bull markets end when the fundamentals erode, but we don't have that problem now. Happily."

Still, her extraordinary constancy may one day be her downfall. At some point, history and the laws of statistics suggest, this market will run out of steam. Few expect that it will be Abby Joseph Cohen of Goldman Sachs who will be the first to call that moment. Indeed, the perception may already be growing that she has become a "Johnny-one-note", suggests the fund manager. If she sees anything negative in the coming weeks, while her bank is preparing to go public, then her position will be doubly tricky. She will not be thanked if she sends the market, and the bank's prospective value, tumbling.

Strumpf, who lives in the same part of Queens and, who like her friend, also rides the bus into Manhattan, knows there may be trouble ahead. "She is in a tricky position and realises it. When you have a good record like her, people wait for you to make a mistake."