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The Best-Performing Stock Manager in America This YearBy
Tuesday, July 15, 2008
Greetings today from Minneapolis, Minnesota – home of one of DailyWealth's favorite investment advisors, Steve Leuthold... Mr. Leuthold never ceases to amaze us. He's done it for 30 years now... Today, one of his mutual funds is the best-performing U.S. stock fund over the last 12 months. It ranked No. 1 on Morningstar's list of 19,500 mutual funds – an exceptional performance. And nearly 30 years ago, he wrote the exceptionally prophetic book The Myths of Inflation. Back in 1980, contrary to every other prognosticator out there, Leuthold was optimistic. He predicted inflation would fall to 3%. He predicted oil prices would calm down. And he predicted stocks and bonds would perform well. It was just brilliant stuff. A few years ago, Steve Leuthold made a huge bet on commodities. He bought tons of commodities... literally! Leuthold was the only fund manager I'm aware of who was actually stockpiling tons of base metals in warehouses. He recently just closed out his fund's position in commodity-related stocks with something like a 450% return in just a few years. (I don't have the stats on this trade with me here in the airport... But trust me, the returns were exceptional.)
Leuthold not only got the call right on commodities, he got the trade right, too. He really maximized his profit... He was bold enough to take a big position when nobody else wanted to. And then he had the stomach to hold on for a long time, when other value investors would have gotten scared out of the trade. Leuthold also brilliantly took a big short position in financial stocks in his Grizzly Short Fund (GRZZX). That bold position pushed the Grizzly Fund to the top spot in stock funds over the last 12 months. So his Grizzly Fund is at the top of the list now... But Leuthold makes bets in both directions. So maybe another of his funds will be No. 1 down the road. (For more on Steve Leuthold and his funds, click here.) He told Barron's, "Our valuation models are indicating that there is not a huge amount of downside risk" in stocks right now. But as far as I know, he doesn't have a big call at the moment. According to Barron's, Leuthold is currently "neutral" on the markets. It's not for a lack of looking... Leuthold just spent weeks traversing China sizing up its investment prospects. The DailyWealth list of legitimate "market experts" is surprisingly short. One of the few names on that list is Steve Leuthold.
Good investing, Steve
Further Reading:
A Shocking Set of Inflation Statistics... Market NotesA NEW BULL MARKET IN SILVER IS STARTING Catastrophe insurance is getting more expensive this week. We're big fans of gold and silver at DailyWealth. We don't think the world is coming to an end... We simply see precious metals as excellent catastrophe insurance – assets that soar when stocks and bonds are sinking. Last week's destruction in Fannie Mae and Freddie Mac counts as a catastrophe... and silver is making good on its "claims." After trading around $17 per ounce since March, the precious metal has broken out to $19. The chart of gold looks much the same. Here's the reason for the strength in gold and silver: Precious metals rise when investors smell serious risks to the financial system. They rise when the government spends too much money and extends too much credit, which stokes inflation. Silver's breakout is a response to the huge liabilities our government is assuming with Fannie and Freddie. In "market speak," silver is telling our officials in Washington, "You're going to spend all that taxpayer money on a big bailout? This could be bad... and I'm heading higher." |
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