Lehman Brothers Holdings Inc Chief Investment Strategist Jef-frey Applegate, who said he "missed the whole bear market," was among 500 people fired this week as the bank copes with a slump in stock and bond trading.
The firings total 4 percent of Lehman's work force, people familiar with the situation said. The fourth largest investment banking had 12,980 employees on Aug. 31.
Applegate became Wall Street's fourth stock market strategist to lose his job in recent weeks, as the securities industry copes with a three-year bear market in equities and investment banking.
In September, Lehman reported a 37 percent profit drop, its sixth decline in seven quarters.
"These are highly compensated people," said Tim Ghriskey, founder of Ghriskey Capital Partners, a Greenwich, Connecticut, money manager. "If you can cut one big salary you can save a whole bunch of small salaries."
Applegate was popular among professional investors during the 1990s bull market. He placed third in Institutional Investor magazine's survey of money managers in 1999. That year, he correctly foresaw that fast-growing companies would rise more than inexpensive, so-called value stocks, and that the largest companies would rise more than smaller ones.
Lehman said the job cuts were across all divisions.
"We are constantly reviewing the scope and scale of our businesses and the environment in which they operate in order to increase our productivity and the firm's profitability," Lehman spokeswoman Hannah Burns said. "We have made small adjustments across all divisions and regions to reflect the challenging environment."
This month, Merrill Lynch & Co fired chief economist Bruce Steinberg and Martin Fridson, a junk-bond analyst. Last month, Credit Suisse First Boston fired market strategist Tom Galvin, who, like Applegate, was among the most optimistic equity forecasters.
Like many of his rivals, Applegate didn't see the plunge coming. At the end of 1999, he predicted that the Dow Jones Industrial Average would end the year at 12,750. He was 2,000 points too optimistic. Applegate didn't return calls to his home and office.
At the end of last year, he was one of the most optimistic strategists, recommending investors keep 80 percent of their assets in stocks.
"So I missed the whole bear market," he said in an interview a year ago. "The question is, `where are we now?' And I think we're at one of the cyclical turning points" that will reward investors in an economic turnaround, he said.
Stock indexes are headed toward their third straight year of losses, the first three-year losing streak in 60 years.
Applegate, who joined Lehman in 1995 from Credit Suisse First Boston, has called missing the 1987 crash his worst call ever. He was working for EF Hutton & Co at the time.
The other job cuts are distributed among all of Lehman, people familiar with the situation said.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source