David Rosenberg: Why having a big chunk of cash on hand is a good idea in this market

There is no other central bank as openly committed to policy easing as much as the Fed, and no other central bank boosting the monetary aggregates at nearly the same pace — a pace that makes a mockery of what we saw in the 1970s. The difference now is this extremely wide deflationary output gap — as wide now as it was at the depths of the Great Recession in late 2008.

Gundlach pulled no punches when he said he has zero interest in playing the U.S. stock market at current inflated levels — like us, he is finding greater GARP-like opportunities across the Pacific . He did note that he is not convinced that there will be money to be made in long bonds, but wants a hedge against deflation winning over inflation. And, all of a sudden, insurance against inflation isn’t so cheap anymore — there isn’t a lot more room in that trade.

Oh, and the cash? Dry powder for when the eventual correction comes. Corrections are part of the market landscape and I will guarantee you that one is coming. It’s just a matter of when. And when you hear the refrain “buy the dip,” here’s the reality: You can only buy that dip if you have some dry powder on hand, unless you want to sell other assets or leverage up.

Is $5 enough?

Malaysia Malaysia Latest News, Malaysia Malaysia Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

David Rosenberg: Undervalued, unloved and under-owned oil and gas stocks deserve another lookIn a market where value and yield are scarce, energy players offer low\u002Dcost access to an income stream in a sector where the bad news is already priced in
Source: nationalpost - 🏆 10. / 80 Read more »

David Rosenberg says Canada's housing market in a 'huge bubble'\u0027This might be one of the biggest bubbles of all time\u0027
Source: nationalpost - 🏆 10. / 80 Read more »

David Rosenberg: What happens when you analyze cash, the lifeblood of any business, rather than earningsSectors with high FCF yields indicate more financial freedom to grow shareholder value or cash that can safely be distributed to investors EconguyRosie Growth of free cash flow or growth of retained earnings is better metric to estimate the potential of the company. If you are only focused on free cash flow, then better for that company to dole out huge dividends rather than a dumb CEO shoving that cash down the drain.
Source: nationalpost - 🏆 10. / 80 Read more »