The Beginning Of The End



Sir Winston Churchill

Or, is it the end of the beginning? Or, is it, as stated in the eloquent and somewhat humorous words of Sir Winston Churchill, ” … not the end. This is not even the beginning of the end. But is perhaps the end of the beginning.” This line was delivered to the attendees at the Lord Mayor’s luncheon, November 10, 1942. It actually drew a chuckle from the assembled mass celebrating the installation of the ceremonial Lord Mayor of London. It was a time of better spirits and hope for Great Britain as she had just been victorious over the Germans in the Second Battle of El Alamein. My title does not evoke hope and is reflective of almost 10 years of negative press given to a secular bull market that has never gotten any respect. Do not despair. This article will have a positive conclusion… I think.

Negative press persists and swells as our recent correction has taken hold


Enter the commentary of former-perma David Rosenberg who got it right (maybe) in 2008, mainly because he turned negative on the market in 2004 … a stopped clock is at least right twice a day. Now when Rosenberg turned negative the S&P 500 was trading around 1132. In the next 3 years, it rallied to a high of 1550 before collapsing to 666 in March 2009. The problem is that he was still negative saying we were in a depression in August of 2010 after the market had regained most of the loss (S&P -1087, down only 45 points from the 2004 warning). He was still negative in 2012 when he posted this commentary about Quantitative Easing (QE) and how it was not going to work (S&P 500 at 1422, 12/1/2012). By October 2013, Rosenberg had had an epiphany, shifting from a long-held investment strategy of Safety and Income at a Reasonable Price (SIRP–A strategy for a deflationary environment) to HIRP (Hedge Inflation Protect Risk – a strategy for what Rosenberg perceived to be a burgeoning inflationary environment). With this seismic investment shiftRosenberg jumped on the theme that rates would rise as result of predicted inflation and wholeheartedly recommended bank stocks, many of which had already doubled off their 2009 lows. Also, by then the S&P 500 was making new all-time highs (10/1/13–1720). My question is why does Mr. Rosenberg, with his shoddy track record, consistently get call-backs from the media soliciting what looks to be his very questionable advice. The only thing I can come up with is that bad news sells. It’s more engaging than good news.

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Vineeta S 9 months ago Member's comment

Bad news certainly does sell...