In his daily note, Gluskin-Sheff’s David Rosenberg explains what he really is:
So you can accuse me of being a perma-bear, but that is just a label that missed the point. I’m a capital preservationist, first and foremost, and a prudent strategist aiming for returns over a business cycle that will exceed anything anyone can garner by relying on the government bond curve or the stock market indices, which themselves are nothing more than concentrated portfolios and as our Chief Investment Officer, Bill Webb, is fond of saying, “accidents of history”.
And in explaining his thesis, he mentions some equities he likes.
As an aside, while I am not at all a big fan of the U.S. equity market as an asset class on its own, there are stocks that I do like — the stodgy large-cap blue-chips that deliver a stable earnings stream, those that have been ignored by the investment community and as such trade at steep price-earnings or price-sales discounts to the overall market, have strong balance sheets and pay out a consistent dividend with a yield that you can’t get much beyond the 10-year Treasury note. That would include some in the consumer staples space, large- cap tech and health care within the U.S. universe. Definitely a bias towards the laggards after a two-year, near-100% rally, and that involves a strategy that focuses on high-quality stocks, which have woefully underperformed so far this cycle and as such offer very good value with very little downside potential and decent yield protection even in the case of a market correction.
Finally, this is a bit odd:
I want to emphasise how important it is to have a core position in hedge funds that actually manage and hedge the risk in this post-bubble period of intense inancial market volatility. I highly recommend a read of the Short View on page 16 of today’s FT. The biggest mistake an investor can make today is to superimpose last year’s bizarre surge in equity market correlations among specific sectors and companies. After hitting a 23-year high in 2010, these correlations have now fallen back to much more normal levels (the lowest in almost four years). This in turn means — the current and prospective environment of low and stable correlations — that relative value trades, following a hiatus in performance last year are very likely going to shine in 2011.
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