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"We're at an inflection point in history," says Loews' (L) savvy investment chief Joe Rosenberg,...

"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."
Comments (13)
  • JamesG99
    , contributor
    Comments (117) | Send Message
     
    Agree with Joe Rosenberg regarding MSFT
    Good Luck!
    3 Dec 2011, 11:31 AM Reply Like
  • Jon T
    , contributor
    Comments (1478) | Send Message
     
    Sorry, I missed the bit about people abandoning troublesome Windows, and no mobile solution, and continuam. Microsoft has massive challenges ahead, it is not a no-brainer.
    3 Dec 2011, 11:35 AM Reply Like
  • Tack
    , contributor
    Comments (13554) | Send Message
     
    Don't know about Microsoft, but his macro observations about equities versus Treasuries are almost too obvious. Nothing remains at extreme highs or lows continuously, and with worldwide monetary expansion added to the equation, all that's necessary is for a moderate increase in monetary velocity to see lots of upside price pressures, which will favor equities and make fixed-rate investments especially vulnerable.
    3 Dec 2011, 12:08 PM Reply Like
  • The Geoffster
    , contributor
    Comments (4013) | Send Message
     
    If I could only time my treasury shorts better, the children would be having a better Christmas.
    3 Dec 2011, 12:51 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9966) | Send Message
     
    Joe Rosenberg is a great market timer and superb stock picker .... yeah right. See his Barron's stock picks and forecasts in February 2008 at the following:

     

    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:
    ======================...
    "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.
    ======================...

     

    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.
    3 Dec 2011, 12:59 PM Reply Like
  • css1971
    , contributor
    Comments (870) | Send Message
     
    He is right we're at a turning point.

     

    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.
    3 Dec 2011, 02:32 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8661) | Send Message
     
    So, umm, what were YOU picking in February 2008?

     

    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.
    3 Dec 2011, 03:06 PM Reply Like
  • coddy0
    , contributor
    Comments (1182) | Send Message
     
    DeepValueLover
    Nobody in 2011 will admit to not being perfect in 2008.
    ======================...

     

    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
    3 Dec 2011, 04:41 PM Reply Like
  • IncomeYield
    , contributor
    Comments (2061) | Send Message
     
    I'll bet this guy has been short Treasuries since the 1980's also. :)
    3 Dec 2011, 01:10 PM Reply Like
  • Canary Cash
    , contributor
    Comments (471) | Send Message
     
    MSFT needs to break down again before it can explode again...2008 broke the stock out of the bottom end of the range but never the top...it has a ceiling and until it innovates in the consumer space again it will likely range, hedged against itself.
    3 Dec 2011, 01:16 PM Reply Like
  • Bruce Whitaker
    , contributor
    Comments (406) | Send Message
     
    2012 may just be the year that MSFT ends the trend of earnings multiple contraction and goes into multiple expansion mode. While the stock has gone nowhere, doomsayers also continue to make predictions that likewise go nowhere. With five year average revenue growth, net income growth and dividend growth that trounces the S & P 500, something has to give.

     

    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.
    3 Dec 2011, 03:43 PM Reply Like
  • Dfishmon
    , contributor
    Comments (19) | Send Message
     
    I totally agree with your assessment of MSFT. I believe this company has a second and third round in them. This is not only a safe haven to park your money in opposed to a bank, MSFT is paying a comfort yield, and with all the catalyst's mentioned above let's not forget to mention it's Kinetics's hardware. Bob Woodward once said never reveal the story before it goes to print but with all MSFT has going for it, it is of my opinion that it is now, and has been for some time a sleeping lion. It's just taking Woodward's advice in different aspect. Wait and hear it's roar!
    4 Dec 2011, 01:17 PM Reply Like
  • Tack
    , contributor
    Comments (13554) | Send Message
     
    Nobody should allow a Microsoft debate divert attention from the more important issue, that corporate revenues, earnings and cash positions are at all-time highs, by significant margins, yet the market is selling at levels well below its own previous highs, which occured when those corporate statistics were much less favorable than now.

     

    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.
    3 Dec 2011, 04:25 PM Reply Like
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