In times like these, you look at the rails and you look at trucking tonnage. If you are interested in international market, you look at shipping. Then you watch top hats and rounders that come out in bullish sentiment, talking upswings, which move well over the correlating charts related to each of the above shipping categories. Then you look at the bears who write with skill about what is really going on in the economy, and contrast that with what is happening in the actual stock market.

This tells you two things:

1) Who are on the dole.

2) Who are not.

Pessimism and reserve, backed up with pages full of reasons why, in this climate are indicative of the voice of reason imo. Breakfast with Dave is about sobriety. His mind, is one of the more even. Such honesty, when interpreting the market moves, is invaluable.

You don’t read Dave for timing. You read Dave for SOBRIETY. When every one else is lying because of their back office operation, and pressure from Wall Street to “talk it up,” Rosenberg preserves the footing of integrity.

In times like these, you look at the rails and you look at trucking tonnage. If you are interested in international market, you look at shipping. Then you watch top hats and rounders that come out in bullish sentiment, talking upswings, which move well over the correlating charts related to each of the above shipping categories. Then you look at the bears who write with skill about what is really going on in the economy, and contrast that with what is happening in the actual stock market.

This tells you two things:

1) Who are on the dole.

2) Who are not.

Pessimism and reserve, backed up with pages full of reasons why, in this climate are indicative of the voice of reason imo. Breakfast with Dave is about sobriety. His mind, is one of the more even. Such honesty, when interpreting the market moves, is invaluable.

You don’t read Dave for timing. You read Dave for SOBRIETY. When every one else is lying because of their back office operation, and pressure from Wall Street to “talk it up,” or Rosenberg preserves the footing of integrity.

So although I may be participating in some of this upside fun, although in retrospect not to the extent I wished I had, I’ve still actually come out fairly well ahead over these last couple years. Unfortunately I don’t think it pays to bet against these guys , at least not for very long and especially when they are all in general agreement so I for one am sure to keep the exit door in clear view. Maybe even have one and a half feet out.

To paraphrase a comment made by Richard Russell during a bear market rally many many years ago ‘the object isn’t to make a killing in one swoop, the object is to survive this thing with all your assets’.

I love Rosenberg’s analysis because it helps shed light on the macro issues. Applying that to a micro strategy is on the investor. I find his analysis incredibly useful and always worthy of the time spent invested.

And while many like to focus entirely on his recent equity calls, they completely ignore the fact that he has been quite bullish on credit and commodities.

I do not know another profession where the predictions are less useful. And I’m a Psychologist.

The information we need is: When it turns (not if it will turn) how far will it likely fall.

That prediction doesn’t let the predictors advertise next year…”I told you itwould fall.”

If you were up just 5% from 2007 until March 2009, then even sitting out the entire rally you are still 50% ahead of the S&P500. If you participated in just half the rally (say from 720 on March 10 to 940 in mid-May), then you are about 95% ahead of the market. So you really didn’t need to catch the whole rally to do well, preventing major losses is just as effective.

I have read David since the spring and he predicted that the rally might go to 1,100 by the end of the summer before it rolled over. He has said the market has been overvalued since about S&P500 850 (which would be true if interest rates climb toward 7%). So long as everyone assumes interest rates will remain extraordinarily low, the market can easily reach a P/E10 of well over 20.

Back in October 2007 it was easy to see that the market would have trouble and be dragged down by the financials. It was easy to see the the crisis was worsening in July 2008 with Fannie and Freddie. It was not so easy for those on the outside to see a debacle like Lehman or AIG coming. Avoiding the decline from 1550 to 1250 was common sense (avoid a typical bear market and you are 25% ahead of the market), avoiding the collapse for many was luck from having reduced exposure due to the general problems. Provided we just have a deep recession and no more crisis shoes to drop I don’t see why the S&P500 wouldn’t reach 1,200.

At the same time, if we only have a recession to deal with why does the Fed deem it necessary to keep interest rates at zero? Why not 1% or 2%? Are things really that bad?

That’s why it’s important to make the distinction between a secular macro view and short-term trading views. Rosenberg is not a trader and clearly doesn’t have a good sense for it. He is a secular macro guy. That’s his thing. It should be noted when reading his stuff.

Trade services and products by country:
http://research.stlouisfed.org/recession/indicators/RealExports_1P.pdf

Nothing is moving besides food and equities stocks:
http://railfax.transmatch.com/