So You Want To Buy Stocks...

TW: Literally as I was punching out this post (Saturday) a feed came across from Barry Ritholz's blog quoting a Barrons piece quoting the same Rosenburg stuff I have below. Funny how the blogosphere works. But we pay more attention to Rosenburg than any other analyst. He used to be at Merrill Lynch before Bank of America gutted the place and replaced him with some happy talkers. Time will tell who is right.

In the mean U.S. employment is in very poor shape, maybe China is miraculously better managed than everyone else lets hope so or else that bubble will pop, and our banking system remains shattered with little consensus on how to fix it. Meanwhile our government remains split between those who would implement Hooverian policies and those who are more broad minded but very beholden to other interest groups (i.e. unions, pensioners etc.).

From David Rosenburg at Gluskin Sheff:
"...It is amazing that anyone would go long an equity market with a reported P/E multiple of 700x but that is indeed what we have on our hands. The end of the recession and the onset of a sustainable recovery, as we saw in 2002, are not the same thing. So this could still end badly but we will await confirmation signs that this is more than a very flashy bear market rally before shifting gears. As we said...yesterday, the cost of missing out on the first leg of a bull market, between the lows in the major averages and the lows in employment, is 20% — the price to pay to sleep at night. If we are late, and we do not intend on being too late or staying excessively bearish, we will know once the most important component of the business cycle, the engine that keeps the motor turned on, otherwise known as employment, begins to turn around on a discernible basis. We shall wait for that event, then make up our minds, and if this is the real deal, which at this time seems unlikely in the context of an ongoing credit contraction, then we will at least have 80% of the bull market to participate in … that is, if historical experience can be used as a guide.

...Something tells us that the marginal buyer of equities today at that price may well be the same person who was loading up on real estate during the summer of ’06..."