David Rosenberg Investment Strategies For The New Normal

David Rosenberg is the President and Chief Economist & Strategist of Rosenberg Research & Associates Inc., an economic consulting firm he established in January 2020. He and his team have as their top priority providing investors with analysis and insights to help them make well-informed investment decisions. Prior to Rosenberg Research, David was Chief Economist & Strategist at Gluskin Sheff + Associates Inc. from 2009 to 2019.

From 2002 to 2009, he was Chief North American Economist at Merrill Lynch in New York, during which he was consistently ranked in the Institutional Investor All-Star analyst rankings. Prior thereto, he was Chief Economist and Strategist for Merrill Lynch Canada, based out of Toronto, where he and his team placed first in the Brendan Woods survey of Canadian economists for ten years in a row.

Mr. Rosenberg received both a Bachelor of Arts and Masters of Arts degree in Economics from the University of Toronto.

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Video Timestamps:
19:30 Stock Market Concerns
27:00 David Rosenberg’s Investment Strategy
32:40 Bank Of Canada Policy Meeting 2020
40:20 Investment strategy for the new normal
48:50 Debt Ratios
49:10 Gold Investment Idea
52:10 Stagflation

How David evaluates asset classes including:
Equities, Fixed Income, Credit, Commodities, and Currencies comes down to an eclectic approach involving technicals, fundamentals, fund flows, market positioning, and valuations.

* Daytrading Skyrocketing – The number of people with Robinhood accounts is at an all-time high.
* Castles Built on Sand – The Fed has taken over the capital markets with a $7 Trillion-dollar balance sheet Powell is a Blackjack Dealer handing the chips out for free. By controlling the markets, the FED is trying to keep everything under control. But with earnings forecasts at 3 years of zero earnings growth, we could be in for a very rough Q4 2020.

The Macro fundamentals are as follows:
– Excessive Valuations
– Excessive Sentiment
– Unhealthy Level of Concentration
– Pure Momentum is driving this market

This has been an impressive bear market rally and now there is optimism over a vaccine. However, with the VIX is sitting at $28 this is a very low conviction rally.

5 Key Index trading strategies:
GDP Recovery Sub Index
Reopening Index
Vaccine Hope Index
Payment Stress Index
Stay at Home Index

There has been a secular shift in how people live and conduct business and the gap between what was and what is will continue to grow. Some of the biggest gainers in the last quarter may surprise you – Retail Sales of Auto Parts, Home Improvement, BBQs, Gardening Supplies, Swimming Pools
The Do it Yourself Stay At Home and Homebody Economy.

The Bank of Canada Policy Meeting lead by Tiff Macklem
– 3 Year Forecasted Recession
– Nonexistent inflation
– Not much of a recovery assuming a vaccine and no lockdown
– Fundamental behavior shift towards balance sheets, cash, and savings
– Personal savings rates are going to stay elevated as consumers adjust behaviors and become more conscious. This is going to impact consumer spending.
– Global Heath Shock turned into a Global Money Shock

Delivery Services have become essential. Consumer staples, Healthcare, Big Tech have all become essentials. Microsoft, Amazon, Google have all become utilities.

Healthcare will become less regulated in the future.

Hedging and diversifying REITS with stable income – residential and industrial REITS benefitting from the Amazon effect.

Investment strategies for the new normal should emphasize work at home, remote lifestyle, cloud computing, and 5G.
*All favoring big-cap tech with utility and essential characteristics. Firma and MedTech
*Value Stocks are beaten up. To gain momentum they need durable reacceleration of global growth. The velocity of money is going down rapidly. Owning growth stocks will be the key to a profitable portfolio in the coming years.

Debt Ratios
*Government debt ratios are going to balloon and the FED is going to own most of this. This will create inflation in the long run.

Gold is a good hedge against the instability of inflation and deflation. With low to negative interest rates, the cost of holding gold is zero. Aggregate demand with overtake aggregate supply. Money supply growth is near 30%. Gold has been going up with the stock market, this is bullish for gold in the long term.

Stagflation will emerge as a secular theme once demand conditions stabilize.

Reduced globalization is coming along with more localized supply chains, the end of JIT inventories, along with new taxation.

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