NEW YORK -- Dean Witter Reynolds Inc. forced out its chief investment strategist, Suresh Bhirud, after a feud over how much money the firm's customers should be investing in stocks.
When he was urging investors to put 20 percent of their accounts in cash in late February, Mr. Bhirud says Dean Witter told him he was being too bearish. He says the big securities firm forced him to urge investors to cut their cash position to 10 percent and put the rest in stocks. This week, the firm further cut its cash position to 5 percent.
"I was the mouthpiece, but they wanted me to be like a puppet that spits out only good things," Mr. Bhirud said in an interview. "I could talk about all these [investment] issues but conclude only one thing: b-u-y, buy."
As it turns out, Dean Witter was right. The market continued rising, and this week the Dow Jones industrial average closed above 3,000 for the first time. Some Dean Witter brokers have loudly complained that they lost customers because of Mr. Bhirud's bearish market calls this year.
A spokesman for Dean Witter, a unit of Sears, Roebuck & Co., said: "It's a simple matter of a relationship that didn't work out. His strategy was flawed."
Noting that the strategist was only one member of the firm's investment policy committee, the spokesman said: "We don't force opinions."
Mr. Bhirud's successor hasn't been named.
The flap vividly illuminates the importance that stock-market strategists have acquired on Wall Street, especially at big brokerage firms that cater to individual investors.
Mr. Bhirud, 43, was the third chief strategist at Dean Witter in the past 2 1/2 years. In December he succeeded John Connolly, the well-regarded strategist who resigned to join a big money-management firm. A year earlier, John Mendelson, a stock market guru whose comments once rocked Wall Street, also resigned.