Wednesday, May 23, 2018

Financial guru 'The Wizard' gains a following after predicting Greek, Euro crises

MIAMI

Smoking a morning cigar poolside at his waterfront Fort Lauderdale home, a top executive at a Wall Street bond operation recalls how he predicted the Greek debt crisis two years ago. That foresight is getting noticed. The Wall Street Journal this year called him "The Wizard" in a column devoted to his forecasts, borrowing a nickname Mark Grant uses for himself in the investment newsletters he sends to clients.

"Besides making money, which is good, I'm also having a wonderful time," said Grant, 61. "That's as good as it gets in this life."

Life has certainly been good to Grant. But now he's enjoying a new windfall: fame. Thanks to an early hunch that Europe might swamp the U.S. recovery, Grant is quickly becoming perhaps the most prominent financial commentator in South Florida.

"Soon, everybody could know Mr. Grant," New York Times columnist Andrew Ross Sorkin wrote in June, dubbing Grant the "Dr. Doom" of the Greek crisis.

Grant's ultra-bearish instincts came out amid recent Wall Street euphoria over news that European leaders were readying a new bailout for beleaguered banks in Italy and Spain. Grant wasn't buying it and urged his clients not to buy into it. "I advise against investing on hopes, prayers and grand schemes that have too often gone astray in Europe," he wrote in an email.

The coming weeks will show whether Grant's latest bet against a brighter day will prove correct. He still sees his early predictions of a Greece meltdown largely coming true, the first step in what he sees as a much broader crisis. With Spain following Greece into insolvency and Italy on the brink, Grant predicts a broad European banking meltdown. That could push the United States into a recession as early as this fall. With the downturn, Grant also sees South Florida's real estate rebound ending and prices dropping again.

"I thought it was going to get bad, and it got bad," Grant said in an interview. "It's a big mess."

Grant was on a yacht in the Bahamas when the Lehman Brothers investment bank collapsed in 2008, sparking a financial crisis that put the United States at risk of a depression. The downturn was apparently good for Grant. In 2009, Grant paid $3.2 million for his 6,000-square-foot house, including a three-car garage that now houses a Bentley, a Ferrari and a Rolls-Royce.

"What I do for a living is serious," he said in an interview, "but you also get a sense of enjoying life." As he wrote in his 2011 book, Out of the Box and Onto Wall Street: "I've learned that a solid work ethic is mandatory for success, but a solid play ethic is also a necessary part of winning."

To his role of grim guru, Grant brings a particularly sunny persona. For his regular CNBC appearances, Grant usually finds himself the only male on the panel without a tie. His postings on investment message boards feature a profile picture of a man in a fake white beard and a sorcerer's cap. Grand Marnier makes occasional cameos in the investment newsletter the lifelong bachelor sends out daily to clients and journalists, as he recounts various cruises and sojourns.

"I don't think I've met anybody who enjoys what he does half as much," Randall Forsyth, editor-in-chief of Barrons.com, wrote in an email about Grant.

The ongoing economic crisis may be Grant's moment. He said his television appearances began during the downturn, and they have been increasing with Wall Street's European worries. He describes his main value to clients as warning them of pitfalls rather than spotting can't-lose investments.

He often refers to "Grant's 13 Rules of Investing." The first 10 are "Preserve Capital" — that is, don't lose money.

"People speculate far too heavily," he said. "I've learned from 38 years on Wall Street, if you can stay away from the sinkhole, you're ahead of the game."

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