Rosenberg Proves: Timing Counts In Equity Markets

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By Rudi Filapek-Vandyck

Probably the biggest proof that every stockbroker, or fund manager, who tries to convene the message that “timing doesn't count for investors with a longer term time frame” should be shot on the spot was delivered by perma-market bear David Rosenberg in his daily musings yesterday.

Rosenberg is becoming more popular by the day and as such probably doesn't need much introduction. His current reputation builds on the excellent commentary he wrote when drawing a salary from Merrill Lynch (when I started reading him), but soon after ML became Bank of America ML Rosenberg moved on to Canadian fund managers at Glushkin Sheff.

At times I have the impression every journalist and his dog is now a subscriber to Rosenberg's daily commentary. As such, I have to assume Rosenberg exerts major influence about general themes of reporting and analysis in the global financial media.

The best way of describing his stance on economies and financial markets worldwide is probably that he is a natural problem-seeker – call him a perma-bear if you want, similar to Gerard Minack at Morgan Stanley in Australia.

In yesterday's edition of Breakfast with Dave, as his daily commentary is labelled, Rosenberg included the following graph (which doesn't need any more commentary if you'd ask me).

Australia seldom figures in Breakfast with Dave edition, but there's little doubt, Chief Economist & Strategist Rosenberg would have been pleased to learn that even in economically-strong Australia the average consumer seems to have taken a more cautious approach to life and spending.

Yesterday's surprisingly disappointing January housing finance data have now economists mulling whether the Reserve Bank will remain on hold at the April meeting. Economists at GSJB Were believe the answer is yes, but then they'd always expected a pause in April and another rate hike in May.

GSJBW economists take another approach this morning, arguing the January housing finance data would have been exactly what the RBA wanted to achieve. Hence, the central bankers' conclusion, suspects GSJBW, would have been: our policy is working, we're on the right track.

Investors may also want to take note from the fact that small cap specialists at Credit Suisse reshuffled their Focus List this week (results released today). Have been added to the stockbroker's selection of most preferred exposures to smaller cap stocks in Australia are Adelaide Brighton ((ABC)), IOOF Holdings ((IFL)), Mermaid Marine ((MRM)), Bradken ((BKN)), PanAustralian Resources ((PNA)) and Whitehaven Coal ((WHC)).

These additions followed the removal of Arrow Energy ((AOE)), Primary Healthcare ((PRY)), Tower Australia ((TWR)), The Reject Shop ((TRS)), Treasury Group ((TRG)) and Pharmaxis ((PXS)).

Credit Suisse analysts believe the Dutch-Sino suitors of Arrow are trying to get what they want on the cheap, and thus a sweetener might follow for shareholders holding out. However, with no other comepting offers on the horizon, Arrow management is facing a near impossible task to extract much more value than is currently on offer, the analysts add.

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