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I am a private investor building a value focused portfolio. While I do not work directly in investing, I do have a financial background and hold the CFA designation. The goal of Margin of Safety Investing is to share my investing journey as I review and analyze investing opportunities using a... More
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  • Is it time to be bearish? 0 comments
    Dec 5, 2010 3:38 PM

    While we hear a lot of positives about the economy, we could count on Dave Rosenberg to put things into perspective and give us a “cooler” (or more bearish?) view of the economy.  I found his latest piece a good summary of what’s going on (click here if you want to subscribe to his newsletter).

    Dave Rosenberg’s key points for me are as follows:

    1-While improving, the current economic situation is still not strong: we need QE2, tax cuts and extended benefits because the Fed and politics are worried of putting the economy back in clear recession territory

    2- The US debt/GDP ratio is getting out of control and into ratios consistent with downgrades in other countries (Canada back a couple decades, EU periphery today)

    3- Gas is back up above $3, often consistent with slowing of growth in future quarters

    4- Yields are up, which will make home financing more difficult…

    5- …speaking of homes, prices are down 3 months in a row the last time since March-May 2009!

    6- Finally the situation in Europe will not be good for the US, Europe representing 25% of US exports.

    I think it’s a good time to be cautious and look for high quality, reasonably priced invesments consistent with avalue approach!

    Many happy returns,


    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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