Mar 15, 2023
Steve Leuthold, Who Called 2009 Stock Market Bottom, Dies at 85
(Bloomberg) -- Steve Leuthold, a money manager who founded the multibillion-dollar investment firm that carries his name and called the bottom of the stock market with near-perfect accuracy during the financial crisis of 2008-2009, has died. He was 85.
He died on March 7 in his home in Carlsbad, California, according to The Leuthold Group, which didn’t cite a cause.
Known for his contrarian investment style, Leuthold was one of the first prominent investors to turn bullish in the midst of the Great Recession. On March 4, 2009, he said stocks would surge and the economy would avoid a depression. Just five days later, the S&P 500 began its history-making 11-year bull market, during which it increased fivefold.
In the year prior to his bullish call, Leuthold’s Grizzly Short Fund had risen 73% betting against US stocks.
“He was a provocative market strategist and a great investor, and I can’t think of anyone who simultaneously performed those two very different roles as well as he did and for as long as he did,” said Doug Ramsey, who succeeded Leuthold as chief investment officer in 2011.
The Leuthold Core Fund outperformed the S&P 500 in total returns by more than 90% from its official inception in 1995 to 2011, the period in which Leuthold was lead manager.
His nonconformity expanded beyond just his market views. He ran his namesake research and investment firm 1,000 miles away from Wall Street in Minneapolis, typed his research notes on a typewriter long after personal computers became mainstream and enjoyed growing heirloom potatoes during his summers in Maine.
A death notice published in the Star Tribune newspaper quotes Leuthold having said, “I am contrary but not for the sake of being contrary. It’s good business. When everybody hates something, we buy it. When everybody loves something, we sell it. There is a warm comfort in being part of the herd. But I can live without it.”
His monthly newsletter, known as the Green Book, was read by hordes of investment professionals. It’s still published today under the leadership of Ramsey.
“It almost served as an on-paper mentor, and it remains one of the go-to publications I still devour every month,” Liz Ann Sonders, chief investment strategist at Charles Schwab, said in an email. “He brought to the world of market/economic research an unparalleled grasp of how markets and economies work, with some of the best valuation analysis ever produced. But it was his warmth and dry humor that was the secret sauce to his decades of extraordinary success and accomplishments.”
Steven Carl Leuthold was born on Oct. 23, 1937, in Albert Lea, Minnesota. While attending the University of Minnesota, he joined the Army National Guard to help pay his tuition. His knowledge of commodities trading — which he had picked up as a trainee at Cargill Inc. — caught the attention of one of his captains, who gave Leuthold a desk job.
“He called me off the line and into his office to chart his stocks,” Leuthold recalled in 2000.
Leuthold later joined Paine Webber as an analyst. After that, he was an investment strategist with Piper, Jaffray, and Hopwood and a portfolio manager at Criterion Investment Management.
He founded The Leuthold Group in 1981. The firm, which began as an institutional investment research firm, later expanded into investment management for corporate pension plans and mutual funds, even launching an exchange-traded fund. He retired over 10 years ago, according to the firm.
His interests outside finance include writing songs, singing and playing guitar. He once worked as a dance-club proprietor. Leuthold founded the Steven C. Leuthold Family Foundation, a nonprofit that donated to educational institutions, animal organizations and social services.
He is survived by his wife, Jeannette Scollard Leuthold, a sister, four children, 10 grandchildren and one great-grandchild.
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