The Case for Taking Profits Off the Table

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March 31 (Bloomberg) -- Leuthold Strategies Founder Steven Leuthold previews today's markets and discusses his investment ideas with Betty Liu on Bloomberg Television's "In The Loop." (Source: Bloomberg)

Airlines that you had bought two years ago when people are -- were quite bearish.

A little different than that.

What we have said is we don't want to buy any more airlines.

But we have two of them who are outstanding performers.

And as long as they continue to outperform the market, we will stay there.

Because we really can't tell how high is high.

But they do look kind of rich compared to historical benchmarks pit they do.

I think we have a stock chart of the airline sector in the s&p and it has been a straight shoot up.

What what made you -- i guess is adjust valuations, is that what would make you sellout?

I am pretty technical.

That is why i am in the city, to talk to the market technicians association.

As long as they continue to show strong relative strength, and as long as they continue to move faster than the moving average, we say let someone else say how high is high.

We will wait until they start losing momentum.

Ad is where technical work comes in very, very handy.

Because value investors, they try to put a target on the stock.

They sell it, and it turns into a growth stock and day are set having to mess having sold 50% ago.

Ivr -- other areas where you are buying where others may be hitting the pause button, is you are worried about inflation.

You are hedging a bit with gold.

Scarlet is looking as what -- at what the world has been watching, which in many respects has been this inflation or deflation.

Especially in the developed world.

Consumer prices slow to half of a percent in march, a four-year low.

He keeps pressure on the european central bank to take some sort of action.

Here in the u.s., inflation is well below the fed's long-term target of two percent and in japan the sales tax increases boozing -- who's being inflation but below the boj target but spurring speculation they will have to add more stimulus.

Not just a problem overseas.

Here in the u.s., the chicago fed president said we are having a hard time trying to get inflation above two percent.

Why are you worried?

What's we are not concerned -- we are not concerned about two percent inflation.

We are concerned about much more dramatic inflation that is probably going to result from so many regions and countries printing money now.

Not just the united states and not -- but in euro land and we are seeing it in japan.

History tells us, you just can't keep running the printing presses without tipping into something that could be much worse.

We are seeing the signs, very early signs of inflation turning in the commodities area right now out of the 20 commodities we monitor.

They are still negative on balance but only by a little bit.

Look at what happened in terms of food prices, look at what happens when you go to the supermarket, and the fact that nobody is concerned about it makes me concerned.

Takes you worried that everyone seems conflation -- complacent about inflation.

The you suspect wanted us to take hold and is no longer absorbed the price increases are no longer absorbed as a whole, will there be a spike up?

There could be.

Another reason why i am reluctant to give up any of my gold position.

Because when you do see the upturn -- we mostly have seen it in the foods at this point.

Not so much in the metals.

Although some like to think -- zinc and nickel are showing signs of stabilization.

But i guess i am just worried about the printing press.

Another thing -- another area you are quite bullish on is nuclear energy.

Look, this world is getting more and more polluted so nuclear energy looks to be a better alternative for some countries.

Julie hyman, i know you are looking and nuclear power.


for all the growth of we are potentially going to see, there are also some event risks when you look at nuclear investments.

I know one of the.

Steve likes is uranium participation out of canada.

A five-year chart, the peak was in february of 2011. since then, the stock is down 40%. the obvious reason is fukushima, concerns about nuclear adoption.

Not just in japan where the 48 nuclear reactors still remain idle, although there are plans to eventually bring them back online.

But around the globe.

In china, however, is where we are seeing a lot of growth.

20 reactors currently.

28 under construction.

More are set to begin construction.

There are growth prospects.

The there is always sort of that risk -- but there is always sort of that risk one more come online, is there a greater risk of an accident that could be another setback for the industry, betty.

Did you see that chart on uranium participation?

Nice, rounding bottom.

That is what technicians like to see.


It is not that they are male chauvinist pigs, but the sign of accumulation in the stock when you see a rounding bottom like that.

What about the event risks?

How do you calculate that?

There is nuclear paranoia in a great many parts of the world.

And in germany and in the united states, there is.

But in places like china, where their biggest concern is people dying from air pollution killing millions, they want clean your desk cleaner air and nuclear is a way to get that.

You see a big french company that does research, it is working on new reactors and expanding nuclear in great britain and in many other places.

When you compare the number of

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