General Investing >> Analyst Interviews >> February 28, 2005

OUTLOOK FOR THE STOCK MARKET & THE ECONOMY: ELAINE GARZARELLI – GARZARELLI CAPITAL INC

ELAINE GARZARELLI, President of Garzarelli Capital, Inc., was a partner and managing director at several major brokerage firms prior to starting her own company in 1995. She has been studying the stock market for over 20 years and has been ranked first team in Quantitative Analysis in Institutional Investor magazine's all-star poll for 11 years. She was also ranked in Strategy and Market timing. She initially developed her sector analysis methodology for predicting industry earnings and the stock market while working as a corporate profit economist with her staff of econometricians. This methodology allowed her to predict the major trends in stock prices and the earnings of 80 S&P 500 industry groups. She is credited with predicting the bear market bottom in the S&P 500 price index in 1982, the top in 1984 and the bottom, the crash of 87, the upturn that followed, and the top and bottom in stock prices in 1990. Her indicators showed an overvaluation in the S&P 500 of 40% in late 1999 and she warned of overvaluation and problems with company cash flow statistics as early as 1996, several months before Alan Greenspan's 'irrational exuberance' speech. Ms. Garzarelli currently uses this mathematical approach for stock market timing and industry selection in producing her Sector Analysis Monthly Monitor. She issues this institutional report to clients managing over $100 million. She was featured as a top businesswoman in Fortune magazine and in BusinessWeek's 'What's In' list. She appears frequently on television, including ABC Good Morning America, CNN's MoneyLine, Fox Business News, and The Nightly Business Report. Ms. Gazarelli spends three weeks each month doing research (working with economists in the industries she covers and analyzing her industry earnings models). During the rest of the month, she presents her forecasts on the economy, the stock market and specific industries to institutional clients. Her education is in economics and statistics at New York University, and she holds a doctorate from Drexel University. Her clients include domestic and international mutual funds, hedge funds and pension funds. Profile
TWST: Elaine, we spoke about a year ago. How did the market do versus

what you expected last year?

Ms. Garzarelli: Our indicators were bullish last February when we spoke

and the small stocks