Good News for a Change

Leuthold Says Stocks Will Surge, Depression Avoided

By Betty Liu and Lynn Thomasson

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 Minneapolis-based Leuthold. 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 benchmark measure of U.S. stocks rose 1.4 percent to 706.08 at 9:56 a.m. in New York on speculation China will add to a 4 trillion yuan ($585 billion) spending plan.

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