In this link, eminent economist and market strategist David Rosenberg highlights many of the issues that are currently contributing to ‘uncertainty’ in world markets:
For the sake of clarity, ‘uncertainty’ generally means ‘pessimism’ when used by economists. However, they should not be confused as one and the same thing.
Rosenberg lists off a number of topics that contribute to a sentiment of pessimism. Unfortunately, his argument is far too one-sided. He concludes his diatribe as follows:
So all this means lower for a lot longer — low growth, low inflation, and low interest rates — from an investment strategy standpoint, it is all about “Safety & Income at a Reasonable Price”, all over again.
Thank you Mr.Rosenberg. None of this is new news. And by the way, the valuation bubble on securities that are assumed to offer “Safety & Income at a Reasonable Price” continues to grow. Accommodative FED policy has not had the intended effect on investment, but what is eminently clear is that agile and inventive companies are very attractive to capital.
That is why Tesla trades at multiples that puts its established competitors to shame.
That is why Facebook is on pace to overtake the entire valuation of the US Telecom sector.
That is why Amazon in worth more than Walmart.
‘Uncertainty’, whether voiced by the head of the US FED or not, will always be in play, and its rewards have tended to favor those that err on the side of innovation.
Safety and income are very important components of our portfolio strategies, but not allowing for growth, can be a risky proposition. Cycles come and go, we would rather accept these revolutions that deny them.