May 11, 2005       Selective notes from annual meeting of Zweig Funds (ZF) and Zweig Total Return Fund (ZTR) from May 10, 2005.

We have various writings on our site in regards to Marty Zweig.

Here is a link of my notes to his book “Winning On Wall Street”

The meeting was not very eventful. I did have the opportunity to ask several questions, and after the meeting I was able to spend a few minutes with Marty Zweig and his portfolio manager Carlton Neel. Here are selective notes I took.

1. Debt / Equity of SP500 (without the financials) is at 37%. Marty mentioned that corporations are more conservative today. Claims corps have paired down debt. Claims companies are “awash in cash and this is a good sign.”

2. Claims that corporation balance sheets contain 10% cash. He mentioned, “that is enormous”. He mentioned that this cash position is a good sign, and that corporations will be better able to weather a “storm.”

3. He claims that fed rate hikes so far are not horrible for the markets. I asked him about his “Fed Indicator” and how in his book, he was very clear on grading rate hikes in his book. His response was that short term rates are so low, probably caused by the fed over doing it, that the rise is not immediately concerning. He mentioned that the market has been flat in the last 11 months, since the hikes started. He mentioned he would be concerned, very concerned, if federal funds rate went to 6%.

4. He mentioned that the cash/asset ratio of Bond Funds are at there highest since the 1980’s. He claims they stand at 4.9%. He mentioned that people are very negative on bonds. He feels this pessimism might be a contrarian indicator which could be a bullish indicator for bonds.

Those are really the only non-repetitive notes which I took. It is always inspiring for me to read or see Marty Zweig.