Bloomberg News

JPMorgan U.S. Chief Equity Strategist Thomas Lee to Depart (2)

March 13, 2014

Thomas Lee, the JPMorgan Chase & Co. (JPM:US) chief equity strategist who has called for gains in American stocks (SPX) for six straight years and got them in four, is leaving the firm.

Lee, 44, is stepping down tomorrow after holding the job since 2007, Brian Marchiony, a spokesman for the New York-based firm, said in a telephone interview. Lee wants to take time away from work, according to a memo sent to employees.

Lee, who worked for JPMorgan for 15 years, is among almost two dozen Wall Street strategists who try to predict the direction of the stock market and advise investors on which companies to buy and sell. He had one of the highest year-end forecasts for the Standard & Poor’s 500 Index, telling investors last week to stay bullish and buy health-care, technology and financial stocks.

“He’s just one of the best strategists in the game,” Philip Orlando, who helps oversee nearly $400 billion as chief equity-market strategist at Federated Investors Inc., said in a phone interview. “I’m surprised and disappointed that a young guy at the top of his game would be resigning.”

Lee, a managing director at the largest (JPM:US) U.S. bank, didn’t respond to a telephone call seeking comment.

Always Bullish

He was bullish at the start of each of six full years as chief equity strategist, forecasting an average annual rise of 14 percent in the S&P 500 over the period. He was more accurate than the average of strategist forecasts in four of the six years, including 2012 and 2013.

Like every one of his competitors tracked by Bloomberg, Lee failed to foresee the stock-market decline in 2008. He called for an 8.3 percent increase in the S&P 500 that year. The benchmark gauge plummeted 38 percent in its worst annual performance since the Great Depression.

Before taking the strategist job, he covered the wireless and telecommunications industry from 1999 to 2007 and added small-cap stocks in 2004, being recognized by Institutional Investor magazine every year since 1998, according to the memo.

He held positions at Oppenheimer & Co., Kidder Peabody & Co. and PricewaterhouseCoopers LLP. He received a bachelor’s degree in economics in 1991 from the Wharton School at the University of Pennsylvania with dual concentrations in finance and accounting.

‘Good Reputation’

“He has a good reputation,” Hugh Johnson, who oversees $2 billion as chairman of Albany, New York-based Hugh Johnson Advisors LLC. Strategists “are helpful in thinking about issues,” he said. “They can tell you what the issues are and give you interesting ways to analyze the issues.”

The S&P 500 will probably end the year at 2,075, Lee said in a March 7 report. Only Weeden & Co. and Canaccord Genuity Securities LLC have higher estimates, according to a survey compiled by Bloomberg of 21 strategists.

At the beginning of the year, Lee stuck to his bullish stance even as the S&P 500 slid as much as 5.8 percent in February. He was ultimately proved correct as the equities benchmark recovered the losses by the end of the month.

His predictions during the rebound were more accurate. His target of 1,100 for the U.S. equity benchmark in 2009 was only off by 15 points.

“His viewpoints have been very much on the money and he will do well wherever he goes,” John Manley, who helps oversee about $233 billion as chief equity strategist for Wells Fargo Funds Management in New York, said in a phone interview. “Hopefully, he reappears somewhere else.”

To contact the reporters on this story: Hugh Son in New York at hson1@bloomberg.net; Joseph Ciolli in New York at jciolli@bloomberg.net

To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net; Peter Eichenbaum at peichenbaum@bloomberg.net Jeremy Herron


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