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TradingHelpDesk Comments (538)
 
Very enjoyable. When you phrase the scenario like that it makes depressing reading indeed for the US. Maybe the global picture is not so gloomy:

1. Chinese GDP forecasts upgraded again for 2009/10.
2. Recovery elsewhere in Asia in motion.
3. Service, manufacturing, housing, consumer confidence all picking in up in the UK. Postive GDP predicted, month-on-month for April and May.
4. Commodity and oil exporting countries including Brazil, Australia and the Gulf are set for multi-year expansions.
5. Global stimulus efforts are making a real impact on demand, though I admit its manipulated demand.

They are some positive global stories if you care to look for them, but I admit for the US, it is a relatively grim picture.
11 Jul 2009, 04:28 AM Reply Like

Clive Corcoran Comments (1207)
 
"Wow, do you think I should be selling rallies here at 886?"

It depends on your time frame and, if you subscribe to Mr. Rosenberg's view we are nearer the top of his range and have stalled there over the last couple of months.
11 Jul 2009, 04:48 AM Reply Like

CautiousInvestor Comments (2779)
 
I'm sorry I missed the show but I watch CNBC less and less.

With consumer spending accounting for 71% of GDP, it will be play a prominent, if not dominant role, in redefining our future economic landscape. With 78 million baby boomers approaching retirement with savaged retirement accounts, it stands to reason they will spend less because of their age and, now, their circumstances.

If this were not enough, everybody else will be delevering through increased savings.These are long-term trends and in the short term I did read, though, he believe the market has priced in operating erarnings of $75 which he believes we will not see until 2012, making the market very vulnerable to corrections as there are twenty four months separating today's pricing from the target.

In Rosenberg's view one of the many possible market disturbances we might see along the way is an accululation of inventory in the third quarter without an increase in final demand.........which would lead to a one quarter bump in both profits and GDP, similar to what we saw in the eraly 2000's. In the fourth quarter, though, we would retreat to the underlying trend.









11 Jul 2009, 09:22 AM Reply Like

K202 Comments (4289)
 
Yes. Asia growth looks pretty good right now and will for as long as those nations with huge trade surpluses can continue to build infrastructure projects, etc. with their stimulus money. If trade continues at its current slower pace, the surpluses won't be enough to keep those engines fueled. What happens when they run out of cash? Unless they turn their focus more inwardly (which, in a way, they are by building infrastructure) on stimulating their own domestic demand, their bubbles too shall pop. Much of the infrastucture spending in China is going toward port facilities expansion and transportation infrastructure from manufacturing concentrations to the ports. They are still too focused on export growth, IMO, and that may end up causing more harm than good. If the world market, especially the U.S., does not rebound (which I don't expect it to do), China and India (and, by extension, Brazil, Russia, Austrailia, and Canada) ecnomies could begin to falter by 2012. Their governments cannot continue to fuel growth forever.

I noticed that the trade surplus dropped to $29 billion last month. It is very possible to stay at these low levels, or perhaps lower, for many years hence. If so, the Asian dynamos will lose their luster as well.

Without the U.S. consumer leading the way, the global economy is very unlikely to bounce back to an activity level similar to what was experienced prior to this downturn. I am not saying that we are going to be muddled in recession for eternity. I am saying that I believe that growth, domestic and global, will settle down and level off at slower rates than what many economists hope. Without the U.S. consumer the world is different place. When will we all wake up to this undeniable fact?

I expect growth to return to the U.S. economy by 2010, but more in the range of 1% to 2 1/2%. And I expect the economy to be mired in this growth range for at least five years. It's going to take that long to work through all the leverage and get unemployment back down to a more reasonable 5-6% level.

Consumer habits are changing, and not for the better from a retailers' point of view. Once again, without the consumer leading the way economic growth will be hard to find anywhere in the world.

So, do I agree with Rosenburg's analysis? At the 30,000 foot level, yes. Is buy and hold dead? Only if you are not selective in your investments. If you are buying cyclicals or indexes or large caps, then yes I think you'd better not buy and hold unless you have a very, very long holding period. But if we can look beyond the indexes and comb through the hubris, I believe we can still find companies that will benefit from changes in consumer patterns and government policies.

I still plan to buy very selectively when I sense that we are near a trough and hold most of my positions unless the fundamentals for the company or its industry change. I seek value base upon underlying growth trends that do not depend solely on overall economic growth. So should we all.
11 Jul 2009, 10:45 AM Reply Like

Michael Clark Comments (7800)
 
Thoughtful post, Mark. Do you have a list of favorite companies?

I'm a trader following a system -- so one stock is as good as another to me, long or short. But I'd love to hear which companies you like in a continuing downturn.

Are U.S. military stocks on your list?
10 Aug 2009, 02:17 AM Reply Like

Laurence Hunt Comments (263)
 
Re MHFT's original post.... That is my optimistic scenario. A multi-year trading range is the best conceivable option!
14 Nov 2009, 08:41 AM Reply Like