David Rosenberg, former economist at Merrill Lynch and current Chief Economist and Strategist of Gluskin Sheff, has had a change of heart. Mr. Rosenberg is infamous for being bearish about the markets but has recently stated that he is hopeful about the future of the US economy, writing, “I do see a light at the end of the dark tunnel”.
Rosenberg is known for his early predictions of the housing and credit bubbles as well as their prolonged effects on the economy. But why the change now? With a potential “Euromeltdown” wouldn’t this be the perfect time to be ultra-bearish?
Apparently not
He justified his more bullish demeanor on recent political elections in Wisconsin and California. He thinks that these elections are a sign that local and state governments are taking their financial problems more seriously.
He did admit that to change the political climate in Washington would take a crisis and that this “light at the end of the tunnel” is in fact at the end of a tunnel that we are still in. He believes that the mindset adopted by mayors and governors will eventually make its way to the nations capital, but it will take time.
Rosenberg has been bearish for so long that people have forgotten that he was once bullish. Perhaps he will always be ahead of the curve, being one of the first bullish economists to hit headlines, just as he was one of the first bears. We’ll have to stay tuned to find out.
Business Section: Investing Ideas
This by no means is a sign that we should all start taking massive risks. It is however a good sign of things to come in the future. Not tomorrow, but perhaps over the next couple months and years we will see things seriously start to turn around in a meaningful way.
To go along with this Doom and Gloom theme, we put a list together of oversold stocks, by the RSI 14 index. (An RSI(14) is below 40 indicated it is oversold) Being oversold, there is a potential that they are trading below fair value. If the market rebounds, these may be among the first to see a price increase. What do you think they are actually worth?
Interactive Chart: Use the Compar-O-Matic to compare market caps for the stocks mentioned below:
1. Abercrombie & Fitch Co. (ANF, Earnings, Analysts, Financials): Operates as a specialty retailer of casual apparel for men, women, and kids. Market cap at $2.52B, most recent closing price at $30.54. RSI(14) at 28.67.
2. Alpha Natural Resources, Inc. (ANR, Earnings, Analysts, Financials): Engages in the production, processing, and sale of coal in the United States. Market cap at $1.88B, most recent closing price at $8.55. RSI(14) at 25.07.
3. FLIR Systems, Inc. (FLIR, Earnings, Analysts, Financials): Designs, manufactures, and markets thermal imaging and infrared camera systems in the U. Market cap at $3.08B, most recent closing price at $19.95. RSI(14) at 27.98.
4. Sara Lee Corp. (SLE, Earnings, Analysts, Financials): Engages in the manufacture and marketing of a range of branded packaged meat, bakery, and beverage products worldwide. Market cap at $11.31B, most recent closing price at $19.06. RSI(14) at 21.75.
(Written by Ryan Horch. Data sourced from Finviz)
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Analyze These Ideas: Getting Started
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Dig Deeper: Access Company Snapshots, Charts, Filings
- Abercrombie & Fitch Co. (ANF, Chart, Download SEC Filings)
- Alpha Natural Resources, Inc. (ANR, Chart, Download SEC Filings)
- FLIR Systems, Inc. (FLIR, Chart, Download SEC Filings)
- Sara Lee Corp. (SLE, Chart, Download SEC Filings)
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What does Roubini have to say to all this?