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 purchase equities because the economy isnât headed for a major contraction. âThese comparisons people make with the Great Depression are totally out of touch with reality, and pretty stupid,â Leuthold told Bloomberg Television in an interview today. âWeâve been in much worse, much more panicked and more scary situations in the U.S.â The economy isnât as bad as it was in 1974, when stocks began rebounding, he added. The Standard & Poorâs 500 Index will surge to at least 1,000 in 2009, Leuthold said. That would represent a gain of 44 percent from yesterdayâs 12-year low of 696.33. Because a rally is likely, investors shouldnât buy his Grizzly Short Fund, Leuthold said. It has returned 26 percent in 2009. http://www.bloomberg.com/apps/news?pid=20601087&sid=a4OJUF46wZ6c&refer=home
The better question is: Is he closing the fund or switching to long or at least staying in cash? After all he already made the return for the year...
One characteristic of secular bear markets is that they sucker even former bears into getting bullish too soon. Livermore made a fortune on the short side early in the 1929+ bear market. By the end of the Depression he was broke from bottom fishing. ALL investors get long too early in the really big bear markets like 1929-32, Asia 1998, Japan 1990-2009 etc.
Glad he is extremely positive about equities but wouldnt anyone else be if they had a double digit return for 2008 and 2009, I disagree with his prediction of s&p @ 1000, there is just no way possible that feat can be achieved in 2009.
Markets had a 50% bear market rally within the 90% decline 1929-1933. A rally to 1000 would be a 44% rally. "No way possible" is a little far fetched. It has happened before.