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"We're at an inflection point in history," says Loews' (L) savvy investment chief Joe Rosenberg,...
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Saturday, December 3, 2011, 10:45 AM ET"We're at an inflection point in history," says Loews' (L) savvy investment chief Joe Rosenberg, comparing today's equity market to Treasuries in the early 80s when he had trouble convincing folks to buy long bonds yielding 15%. One favorite is Microsoft (MSFT), a better buy by every metric than a recent purchase of Warren Buffett's. Among his other picks: JNJ, MRK. A pan: Treasuries, "in the final throes of one of the greatest bubbles I have ever seen."
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Good Luck!
http://bit.ly/sl1udk
Appears to us that this guy is just your standard run of the mill buy, buy, buy market pundit that is incapable of recognizing huge market risks and when equities really are "cheap".
See for example his first two Feb/08 picks:
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"Symbol / Co Last Price Change Analysis
MSFT
Microsoft Corpora... $25.22 -0.06 )))) (today's price not 2008)
(-0.24%) Q: Where can the stock go?
A: If by some miracle, the Yahoo! deal falls through and Microsoft goes it alone and it can achieve my estimate, which is north of $4 in 2012, the stock could be trading at 80 in a few years. Even if Microsoft buys Yahoo!, the stock could be a lot higher.
JNJ
Johnson & Johnson $63.47 -0.98 ))))) (today's price not 2008)
(-1.52%) Q: How about drug stocks?
A: Johnson & Johnson [JNJ] is cheaper than it has been in a long time. It's trading around 62, which is 14 times this year's estimated profits. It continues to be a world-class company. J&J bought the over-the-counter business of Pfizer [PFE], and it's made a real go of it even though a lot of people thought J&J overpaid. They didn't realize that Johnson & Johnson did the deal on a very tax-advantaged basis.
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Joe Rosenberg a great market timer and stock picker, right. Recommends MSFT in Feb/08 at $28-30/share and claims it could go to $80 in a few years.
And how did it do and how was his market timing? Well within a year it was down to $14-15 and today almost 4 years later MSFT is at $25.22
And how great was his recommendation on Fannie Mae? He was recommending it as a great buy at about $31/share and bragging how he was going to make $8-9/share per year on Fannie. Today's price $0.31/share. Only a 99+% loss on his recommendation.
Yeah, this guy is one great stock picker and market timer alright. Recommendations and losses from Joe Rosenberg are about as good as using your investment dollars to light your daily cigar.
I'm not convinced by stocks though. Turning points don't happen because stocks are too low, or bonds are too high. They happen because the monetary environment has changed. Take a look at the environment, does it look like it will be good for stocks?
Maybe some. Definitely not all.
No, let me guess:
1. You sold out financials then shorted them.
2. You put all of your proceeds in gold and Treasuries.
Nobody in 2011 will admit to not being perfect in 2008.
Nobody in 2011 will admit to not being perfect in 2008.
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Disclosure:
I was not perfect in 2008
I was not a chief investment strategist in 2008
Neither I am now and in the next 72 hours
Late to the party with a viable smartphone as well as a lack of meaningful penetration into the tablet market, too many investors are writing this behemoth off. It is quite possible that 2012 will be a watershed year for MSFT. With the introduction of Windows 8 and a big push into smartphone space via Nokia and Samsung, a widening lead with XBox, and the best selling and most popular business software available, MSFT is also poised to be a meaningful competitor in the cloud.
Financially the company is rock solid. Those who believe that margins will contract, that sales will suddenly soften and that 3% is too paltry a dividend for a software company (who are these people?) should avoid this stock. Those who think otherwise will likely see Microsoft's price to earnings multiple stabilize or expand. Even at its current extraordinarily low multiple MSFT share prices should march higher year after year for the foreseeable future. If you think Windows 8 and its likely integration between PC, Tablet, Phone, XBox and the cloud as a positive catalyst, stay tuned.
Conversely, bonds are selling at radically-high prices (i.e., low yields) simply out of fear and without regard to other fundamentals. That they can't stay there perpetually is hardly debatable; the only real question is how long before the tide starts rushing the other way.
The best way to navigate the above waters is to build a diversified portfolio, weighted toward equities and some commodities, but with a substantial yield component to the portfolio, so that if the inevitable reversal takes more time than imagined, the portfolio will nonetheless throw off significant income in the intervening period.