Famously dour Gluskin-Sheff economist David Rosenberg is out defending himself of being a mere perma-bear who’s been totally wrong throughout the rally.
(Via FT Alphaville)
I stand accused of having missed the turn and that accusation comes from the throngs who believe that the only way to generate a positive return is through the equity market. You see, for so many pundits, you are labelled a “bull” or a “bear” based on how you feel about the equity market. You turn on the various business shows on bubble-vision, and it’s all about equities; one would think that there is no other market on the planet.
The equity market, of course, is the asset class that captures most of the attention and is the asset class that portfolio managers are most bullish on. It is truly a commentary on human nature; the asset class that has generated the most negative return for investors over the last decade — despite the S&P 500 piercing a record 1,500 on three separate occasions and even with the 60% rally of the March 2009 lows — continues to generate the most enthusiasm.
I never did turn bullish enough at the lows, which is true. But I did turn neutral and while I did see the prospect of a complete throw-in-the-towel move towards 600 on the S&P 500, I can recall putting in print that the good news was that the bear market was about 95% over. Why quibble about another 60 points at that juncture. And, in the name of keeping an open mind, in my final report at Merrill Lynch, I played a game of Devil’s Advocate with myself … what if I was unduly bearish?
I didn’t stay bearish at the lows, which is contrary to popular opinion. I was basically neutral. And I continued to — still do, by the way — frame what we have experienced in the context of a bear market rally as opposed to the onset of a new secular bull market (the first you rent, the second you own). I am always sceptical of rallies that are purely premised on technicals and liquidity but bereft of a solid economic foundation. While green shoots did appear in the economic data, all the growth we have seen globally, and in the U.S.A. in particular, has come courtesy of unprecedented government stimulus. We see nothing organically in the economy to get us excited.
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