George Friedlander of Smith Barney, Harris Upham & Co. and Aaron Gurwitz of Goldman, Sachs & Co. tied for the first team All-American municipal bond portfolio strategist.

"I cannot imagine two analysts with more different approaches," said David Clapp, general partner at Goldman Sachs.

"We're totally different," Mr. Friedlander agreed.

Mr. Friedlander fights a tireless and feisty battle to find value for high-net-worth clients for Smith Barney, while Mr. Gurwitz champions strategies that benefit investors and issuers alike.

Long-term Friendly Rivalry

"You may not realize how wonderful it was to see George Friedlander win first team honors in 1991 after Aaron Gurwitz finished first in 1990," said a former Smith Barney analyst. "I remember when they both were starting out at Smith Barney and they were always great rivals."

During 1992, Mr. Gurwitz published a series of articles explaining how derivatives work for investors and, of course, issuers. He tackled the difficult subject matter in a clear and readable manner.

For investors, Mr. Gurwitz explained how derivatives can hedge against adverse changes in interest rates while providing an opportunity to benefit if rates should favor the portfolio.

Issuers can save money in the new-issue market by using derivative products that capture the interest payment stream they want, while issuing debt with interest-rate payments that are the most attractive for the investment community. The result is a significant drop in the all-in cost of funds to municipalities.

Article on Retail Risk

Mr. Gurwitz published a controversial article suggesting that retail investors were not fully aware of the risks associated with extending the maturities of their investments when searching for extra yield.

Moreover, he questioned the effect any sudden backup in interest rates would have on mutual fund investors particularly in a period of heavy redemption in the funds.

Mr. Friedlander has a solid grasp of the macroeconomic issues driving the various fixed-income markets.

Next, he looks at interest rates, supply and demand factors, investor psychology, credit trends, and trends in the spreads between municipal bonds and securities outside the industry.

High Score on Rate Predictions

He has correctly anticipated that interest rates would remain low or even drift lower over the past several years.

Even though supply has increased due to the historically low interest rate environment, spreads between credit qualities remain stubbornly tight. "This is the opposite of what you'd expect to see during a recession."

Mr. Friedlander advises investors to take advantage of the tight spreads by upgrading portfolios; it costs little to capture a much higher quality issue.

In Praise of Plain Vanilla

Over the past several years, Mr. Friedlander has sung the praises of plain-vanilla, bedrock-solid revenue bonds.

For all the differences in their respective approaches, Mr.Gurwitz and Mr. Friedlander have both demonstrated the best qualities in the municipal analysts' profession.

Mr. Friedlander and Mr. Gurwitz have developed large followings that strongly support each of the analysts in the All-American Municipal Analyst Team voting.

Despite heavy voter turnout in this year's balloting, each analyst had the same number of votes.

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