A Look Back At the Many Bullish Calls of JPM’s Thomas Lee MoneyBeat

Post on: 30 Январь, 2016 No Comment

A Look Back At the Many Bullish Calls of JPM’s Thomas Lee MoneyBeat


One of the stock market’s biggest bulls J.P. Morgan ’s Thomas Lee – is putting himself out to pasture, for a short while, anyway.


Mr. Lee, who has been almost non-stop bullish since taking the job as the banks U.S. head equity strategist in 2007, is leaving the bank to take time off. according to an internal memo to employees.

It isn’t clear yet where he’s headed, or what J.P. Morgan’s plans are to replace him. Calls to Mr. Lee, 44 years old, weren’t returned.

In recent years Mr. Lee has looked pretty smart, sticking to forecasts for a rallying stock market in the face of widespread investor skepticsm.

But he started off on the wrong foot. On Dec. 5, 2007, when the S&P 500 was on the brink of a 38% yearly decline, he said the market was “near a tradable bottom” and set a year-end target of 1590 for 2008. The index ended that year at 903.25 as the financial crisis decimated Wall Street. However, he wasn’t alone: none of the strategists at Wall Street’s big brokerage houses foresaw anything remotely resembling the carnage of the financial crisis.

Since then, his track record has mostly shown the benefits of bullishness in a market that has more than doubled from its financial-crisis lows. The S&P 500 ended 2009 just 1.4% away from his target. It ended 2010 just 3.3% away from his forecast of 1300.

2011 didn’t help his track record, though. That’s the year the euro-zone debt crisis and a U.S. debt-rating downgrade sent U.S. stocks reeling. He said Europe faced debt problems, but before page 17 of his yearly report, all he mentioned was that the bank’s economic team forecast stronger economic growth in Europe than Wall Street’s consensus.

“Peripheral European risk is manageable… contagion risk likely limited to Portugal… we believe Spain and Italy will be spared,” he wrote. Just ask Silvio Berlusconi how that one played out.

He hardly mentioned Greece at all.  Later that year he said that no matter which way Greek elections went – which would help determine whether the country would leave the euro zone and thereby destabilize a major global currency – “outcomes are positive for equities .”

For 2012, he unveiled what he called a “contrarian” view that stocks would rise. And he was right. The S&P ended the year just 0.3% away from his target.

He did take some bearish stances. Unfortunately, one came right before the market bottom in 2009. when he said he thought stocks would trade sideways until the second half of the year.

The latest was in the early stages of last year’s roaring rally. saying that rising gas prices and a payroll tax hike would take a bite out of consumer spending. That one didn’t last very long. and he rejoined the bullish ranks before the end of the year.

As Mr. Lee takes his break, he’s holding to a positive view on stocks. He has a year-end target of 2075, a 12% rise from Thursday’s close, going off his last note, on March 7.

His advice to investors in that note: “Stay bullish.”

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