By Susan Antilla
As one of Shearson’s top stock market, analysts, Elaine Garzarelli is usually right on target. But her flashy style and shameless self-promotion break all the rules.
Elaine Garzarelli: Wall Street’s Unconventional Star
Garzarelli, 39, isn’t your typical research analyst. She’s the hottest woman on Wall Street.
What makes Garzarelli so successful is her foresight. Her major claim to fame is that she predicted the market crash a full week before it hit on October 1, 1987. She was also correct last fall as the Persian Gulf war loomed. Most analysts advised clients to convert to cash, but Garzarelli urged investors to buy stocks, drawing laughter from competing analysts. By mid-March, the Dow Jones Industrial Average had dropped 13 percent, and the skeptics’ smiles faded fast.
Two Arenas of Finance
Garzarelli operates in two financial arenas. For two weeks each month, she holed up in her Greenwich Village apartment to produce her Sector Analysis Monthly Monitor, a 100-page market forecast advising clients on investment strategies. The other two weeks, she travels the country meeting Shearson clients over breakfast, lunch, and dinner. In between calculations and phone calls, she also manages a $500 million mutual fund for Shearson.
Her track record throughout the 1980s was impressive. According to Coopers & Lybrand, an accounting firm hired to review her research, investors who followed her advice between 1982 and 1987 outperformed the stock market by an average of five percentage points per year. Only a handful of money managers consistently matched or surpassed the Dow.
Mutual Fund Performance
Although the mutual fund Garzarelli has managed since 1987 initially fell short of expectations, investors aren’t complaining now. In the first three months of this year, her Sector Analysis Portfolio fund gained 22 percent—far ahead of the Dow’s 11.6 percent. Despite strong gains in the stock market, she remains extremely bullish. “The Dow can go to 3,900 unless the Federal Reserve raises interest rates,” she says. “The time to sell stocks would be if the three-month Treasury bill rate rises to 6.6 percent.”
Breaking the Rules
The vivacious Garzarelli has become a stock market superstar by being brainy—and breaking all the rules. A Shearson executive vice president notes that she is rarely in the office, regularly arrives late to meetings, and courts the press with refreshing candor. In a business where executives often hide behind public-relations staffers, Garzarelli personally returns reporters’ calls and makes numerous television appearances. She even follows up negative coverage with questions of her own.
When Business Week put her on its “What’s Out” list in 1989, she called reporters seeking an explanation. When Institutional Investors ran an unflattering drawing of her on its “All-American Research Team” cover, she called the artist to provide new photographs to look better the next year.
Style and Image
On Wall Street, where conservative dress is the norm, Garzarelli stands out. She owns ten pairs of color contact lenses, wears short skirts and spiked heels, and occasionally winks at clients and colleagues. Unsurprisingly, she has faced criticism for being a media hound and a flirt. Former Shearson broker Patricia Mulligan notes, “Elaine had a great hairdo and wore great clothes, and there was something about that which rubbed people the wrong way.” Her flamboyant style has upset some women on Wall Street, who feel it does not help the perception of women in finance.
Garzarelli remains unfazed by personal criticism. “Why shouldn’t I be stylish? And so what if I’m friendly and outgoing? I call it enthusiastic,” she says. She admits, however, that she tries to be mindful of public perception, especially on television. Friends describe her as seeking validation, not the spotlight, as a reminder of her worth.
Handling Criticism
Garzarelli takes a firm stance against detractors of her work. She quickly offers samples of her analysis or politely warns about legal action if criticism continues. She emphasizes that her track record speaks for itself, and clients confirm the accuracy of her indicators.
Early Life and Education
Garzarelli credits her drive to her mother’s determination to raise her like a boy. Growing up in suburban Philadelphia, she excelled in school. At Drexel University, she initially studied chemical engineering but switched to economics in 1971, inspired by an introductory course. As an undergraduate, she worked part-time for the chief economist at A.G. Becker, devising a system to predict stock movements. She later started full-time while earning her master’s in business at Drexel.
Career Breakthrough
Her big break came in 1980 when John Hindelong became director of research at Becker. He encouraged her to make television appearances, which she did despite initial fear, motivated by a bonus tied to a poll ranking by Institutional Investor. By 1984, networks like CNN and PBS had discovered her—and so had Shearson.
Facing Sexism on Wall Street
In the early days, male clients doubted her abilities due to her age and gender. She used sexism as motivation to work harder and prove herself. She successfully refused restrictive contracts and navigated unwanted advances, valuing her independence while also expressing a desire to adopt a child.
Personal Style and Client Relations
Elaine Garzarelli balances a strong personal style with professionalism. While her peers decorate offices with traditional prints, she displays autographed photos of rock stars like Joan Jett and Cyndi Lauper. Clients see no contradiction, noting her tactics to stay on top are similar to the methods men use.
Where Women Do Best on Wall Street
Women have historically faced challenges on Wall Street, but research and sales are areas where they excel. At Shearson, a third of the research department employees are women. Research analysts like Garzarelli either focus on big-picture market trends or specific industries. Salaries start around $50,000, but exceptional analysts can earn much more, with opportunities for media exposure and self-promotion.
In sales, women can advance quickly. After building a customer base, brokers earn between $70,000 and $100,000, with top performers potentially earning up to $1 million within a few years.
For those seeking a career in investment banking, entry-level positions and a proven record are crucial. However, when market conditions improve, work hours typically increase, making research positions a more manageable entry point.
