Word: leuthold
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Dates: during 2000-2009
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...notwithstanding, big investors may be betting on better news around the corner. "If you believe as I do that we'll be coming out of recession by year end, then this is about the time you would expect to see the start of a cyclical bull market," says Stephen Leuthold, president of Leuthold Group in Minneapolis, a firm with $5 billion in assets. Leuthold has studied stock markets and recessions going back to 1860. "We found that in all but two instances, the stock market began to recover about 50% to 60% of the way through the recession...
Right now, says Leuthold, institutional investors are moving back into stocks, not because they're confident of a recovery, but because they're loathe to miss an important market move. "The pension funds are way below their actuarial assumptions, and they're afraid they'll be left behind if they sit with too much cash," he says. In other words, performance fears could replace recession fears...
...decision before investors, many badly battered, is not an easy one. Stocks are cheaper, but their investment portfolios are likely thinner. Eric Bjorgen, an analyst at Leuthold Group in Minneapolis, notes that in face of low prices but a very uncertain near-term future, an investor's patience should be the determining factor: "This is a market only for those with a multiyear time horizon...
...dismaying summer swoon. Will the autumn surge be another false positive? Consider the odds: over the past 100 years, half of all sustained market rallies (measured by the Standard & Poor's 500) ended without reaching their reigning all-time high or dried up shortly thereafter, according to the Leuthold Group...
...stock craze made sense for a while. Large caps were runaway winners in the late 1990s, before the group became insanely overpriced and ultimately collapsed. But now it's the small caps that "have gone about as far as they can go," says Andrew Engel, a portfolio manager at Leuthold Group...