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A guru gets caught in 'Net
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October 8, 1998: 7:49 p.m. ET
When Acampora revised his market forecast, Prudential's Web site lagged
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NEW YORK (CNNfn) - It can beam otherworldly images of the Martian landscape to your laptop in seconds flat and download, byte by salacious byte, the unabridged text of a certain Independent Counsel's final report in the time it takes to swat a fly.
But don't expect the Internet always to keep pace with the analytical whims of Wall Street's reigning market gurus.
In these days of incredibly shrinking markets, the strategists' tendency to change their minds on a dime can leave the on-line sites of Wall Street's mightiest investment firms scrambling to play catch-up with their own wizards.
In the latest case of cyber-lag, Ralph Acampora, Prudential Securities' chief technical strategist and a notable Wall Street bull, revised his market outlook downward Thursday -- but failed to have his site promptly updated on Prudential's Web page to reflect the new projection.
Hence, Web-surfing investors who logged on to Acampora's site Thursday at any time during trading hours were privy to the following strategic insight:
Radically differing trading ranges
"We reiterate our belief that trading ranges are in place: 7400 low and 8250 high on the DJIA (Dow Jones Industrial Average); 940 low and 1066 high on the S&P 500. Careful stock selection is paramount at this time. The overall market must build a meaningful base before we can launch a sustainable advance." The posting time above the text was "October 8, 1998, 9:35 a.m. EST."
At around 11 a.m., however, Acampora issued a "media alert" after shifting his stance to a more bearish projection.
The revised release, sent to news organizations and Prudential clients as the market lunged and lurched, repudiated the earlier projection. It read, in part: "I have concluded that the Benchmark lows on the Dow of 7400 and the S&P (of) 940 will not hold. I now have a target for the Dow of between 6500 and 7000: probably around 6700. I now have a target on the S&P of between 745 and 870."
A Prudential employee who requested anonymity said the discrepancy was little more than a case of differing schedules between Acampora and the technical personnel who maintain Prudential's Web site.
The employee said Acampora issued his initial analytic perspective on Wednesday evening, before leaving work, and passed it on the Prudential's Web-site technicians for posting. This was done the next morning.
Yet because Prudential typically updates its site on a daily basis -- and not hourly, as Web news sites are wont to do -- the obsolete outlook remained on the site long after Acampora's change of heart. On Thursday evening, the 9:35 posting still greeted after-hours visitors to Acampora's home page.
Most analysts are bound to shrug off Prudential's oversight -- especially since Acampora's updated prognosis was given wide coverage on television networks and in wire reports. Any investor savvy enough to log on to Acampora's Web site, they point out, would inevitably have heard of the revision.
If anything, analysts say, the Acampora episode merely underscores a lesson that scarcely bears repeating to most Web afficionados: When it comes to disseminating information, many companies -- even big investment firms that thrive on the ephemera of stock trades -- still treat the Web like a second-class news source.
Unlike Prudential, many brokerage firms deliberately keep their strategists' valuable market perspectives off their Web sites.
"We don't provide research" on-line, said Selina Morris, a spokeswoman for Merrill Lynch. Instead, Morris said, Merrill Lynch updates its Web site about two to three times a week with generalized information on topics ranging from global research highlights to fixed income.
Merrill reserves the chapter and verse of market strategy for its paying institutional clients, who "get the full scope of our research," Morris said.
At Goldman Sachs, glimpses into the innermost thinking of the firm's top talent also are limited to private clients. These customers are able to log on to special accounts on Goldman's Web site to receive Goldman's written commentaries on market issues before they are broadcast to the public at large -- usually at 10 a.m.
By then, Goldman's sales force and client base -- as well as First Call, Wall Street's in-house corporate earnings watchdog -- already have digested the information, according to Greg Ostroff, head of U.S. equity research at Goldman Sachs.
Chris Cosentino, a spokesperson for Lehman Brothers, said the material posted on the company's Web site is typically 48 to 72 hours old.
As Cosentino sees it, Lehman Brothers is not in the information charity business: The firm's research is valuable and there is "no good reason" to simply dump it on the Internet for public perusal.
Nonetheless, Cosentino said, when information of a timely nature comes to light that may be at odds with material on the Web site, the company is quick to fix the discrepancy.
"If we put out something on company X and three days later something radically changes that would make us have a different view of company X," the company would take the old posting off the site.
--By staff writer Douglas Herbert
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