Steve Leuthold of Grizzly Short Fund say Stocks will Surge, Depression Avoided – Bloomberg


By Betty Liu and Lynn Thomasson – Bloomberg

March 4 (Bloomberg) — Steve Leuthold, whose Grizzly Short Fund returned 74 percent last year betting against U.S. stocks, said now is the time to buy equities because investors are too fearful about the economy.

“These comparisons people make with the Great Depression are totally out of touch with reality, and pretty stupid,” he told Bloomberg Television in an interview today. “We’ve been in much worse, much more panicked and more scary situations in the U.S.”

The economy isn’t as bad as it was in 1974, when stocks began rebounding, said Leuthold, who oversees $3.2 billion at Leuthold Weeden Capital Management in Minneapolis. He predicted the Standard & Poor’s 500 Index will surge to at least 1,000 in 2009, representing a gain of 44 percent from yesterday’s 12-year low of 696.33.

The index rose 2.2 percent to 711.96 at 11:46 a.m. in New York on speculation China will add to a 4 trillion yuan ($585 billion) spending plan and U.S. lawmakers will reach agreement on a plan to stem mortgage defaults.

Because a rally is likely, Leuthold said investors shouldn’t buy his Grizzly Short Fund. It has returned 26 percent in 2009. Short seller Bill Fleckenstein, who warned of the housing bubble in 2005, closed his 13-year-old bear market fund last year because valuations made it “too dangerous” to bet on more losses, he said in a interview last month.

China, Korea, Taiwan

The Leuthold Core Investment Fund, which bets on stock gains, is most concentrated in biotechnology companies, automotive retailers and education providers, Leuthold said. Investors should also buy equities in China, Korea and Taiwan because their economies are growing faster and the Asian banking system hasn’t been battered by subprime loans as badly as U.S. financial institutions, Leuthold said.

The Chinese economy may grow 7.7 percent this year, compared with a 2 percent contraction in the U.S., according to the median economist estimates in a Bloomberg survey. North American financial firms have reported $811.2 billion in credit losses and writedowns tied to mortgage defaults, 27 times more than banks in Asia, according to Bloomberg data collected since the housing slump began in 2007.

“We’re going global,” he said. “Global investing is the way of the future.”


Steve Leuthold is founder and Chief Investment Officer of The Leuthold Group, LLC, an investment management and institutional research firm. He is the Portfolio Management Team Leader for Leuthold Funds and a member of the Board of Directors. On the research side, Steve and the portfolio management/analyst team employ quantitative historical research to develop sophisticated models which drive the investment management decisions.

Considered an industry expert, Steve Leuthold makes appearances on nationally broadcast financial programs, has served as a contributing editor, authored articles for major industry publications, and is frequently cited in leading trade journals. Steve has conducted seminars at universities, and makes presentations at meetings and investment conferences throughout the country.

Prior to founding The Leuthold Group, Mr. Leuthold was an Officer and Portfolio Manager of two mutual funds for Criterion Investment Management; and from 1969 to 1977, he was an Officer and Investment Strategist at Piper, Jaffray & Hopwood. Mr. Leuthold also previously served on the Board of Directors of Weeden & Co., L.P., an institutional equity trading firm.


One Response to “Steve Leuthold of Grizzly Short Fund say Stocks will Surge, Depression Avoided – Bloomberg”

  1. […] my March 4th posting on Steve by clicking here – he called the […]

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