Thursday, November 04, 2010

Great Data From Fellow Contrarian, David Rosenberg

The quote below is from David Rosenberg's, "Breakfast With Dave," dated 11/01/2010.

"In any event, the survey of the Big Money Poll from Barron’s shows that 62% of portfolio managers see equities as the top performing asset class in the next 6-12 months — versus 15% for precious metals, 6% for cash and 3% for bonds.
You don’t have to be much of a contrarian to understand what it means to have twice as many investors more bullish on cash than on bonds. It’s otherwise known as a herd mentality. Fully 72% are bearish on Treasuries, only 5% are bullish (versus 60% and 15%, respectively, for equities) and yet 62% believe bonds are in a bubble.

How can bonds be in a bubble and at the same time be so detested? One of life’s greatest inconsistent thought processes at the current time!

Not only that, but 70% see little chance of another economic contraction. And, 70% favour the stock market on expectations of better jobs data, a stronger economy and rising profits. To top things off, BusinessWeek runs with this article to boot — Stocks and Bonds Are Bullish on the Economy (come again?) on page 47. At least we know where the surprise will be, if any!"


Only by standing against the prevailing winds – selectively, but resolutely – can an investor prosper over time. Such a strategy may underperform during markets that are rising based upon the “momentum of the herd" verses fundamental valuations. 

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