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Saturday, September 11, 2010
An interesting post by Justin Paterno examines David Rosenberg (former chief economist at Merrill Lynch) searches using the Google Insight tool, introduced in a previous post. Using the tool, a case can be made that David Rosenberg is a useful contrarian indicator.
But looking at Rosenberg's charts and thinking about what we are supposed to do as investors versus what the pundits tell us to do gives us better direction. Consider the following:
CLICK IMAGE TO ENLARGE Question: when is a good time to get involved in the market--when we have a normal recovery and everything is climbing apace or when the economy is still struggling many months after the end of the recession? Let me restate this: do you want to buy after prices have made a strong surge upwards or after they have bounced along at low levels, considerably below their highs?
I believe that investors should put ear plugs in and look for really lousy macro economic charts and that is the time to get in. This presupposes you are a market timer. But all the evidence shows market timing is futile, and I accept the evidence.