Steve Leuthold, whose Grizzly Short Fund returned 74 percent last year betting against U.S. stocks, said the Standard & Poor’s 500 Index will surge to 1,100 after valuations got to the cheapest levels of his career in March.
Leuthold, 71, who helps manage $3.2 billion as founder of Minneapolis-based Leuthold Weeden Capital Management, said most investors should have 65 percent of their assets in stocks.
“This market was about as cheap as I’ve seen in my 45 years in this business,” Leuthold said in a Bloomberg Television interview today. “We’re probably going to see the economy start turning upward, not now but toward the end of the year. The market is a lead economic indicator, so the time clock is about right for the market to turn up”
He said the largest U.S. companies are more undervalued than the smallest. Leuthold’s 2009 forecast for the S&P 500, which sank to 676.53 on March 9, represents a 28 percent gain from yesterday’s close of 858.73.
Leuthold also said that financial shares won’t be the stock market’s leaders. He favors technology and biotechnology companies and advised investors to avoid “defensive” consumer shares and utilities.