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In his latest Breakfast With Dave note, Gluskin Sheff’s David Rosenberg offered his thoughts on the markets for 2013.”I think it will be a flat year for the broad equity markets in 2013 but what worked in 2012 should work in 2013, namely “safety and income at a reasonable price” or SIRP,” he wrote. “Within the equity market, to me it is again going to be about screening for dividend growth, yield and coverage in sectors with defensive characteristics.”
So, Rosenberg likes dividend stocks.
However, he doesn’t like all dividend stocks.
“Can’t get into specifics but certainly you can short companies that are borrowing to fund their dividend policies,” he wrote. “Basically businesses that do not generate enough cash from operations to fund their dividends.”
Lately, companies have been taking advantage of low interest rates to borrow cheaply and buy back stocks.