David Rosenberg: 'Investors are Betting on a 1-in-20 Event'

David Rosenberg, founder and president of Rosenberg Research, joins Maggie Lake to discuss what he got wrong last year and why, and his outlook for the year ahead. He breaks down why the AI revolution may not justify the market’s extreme expectations, what sectors and assets he’s looking at in a year that is “a bog of uncertainty,” how he thinks Canada could hit back at Trump’s tariff threats, why he thinks the US exceptionalism story is built on unsustainable fiscal stimulus that’s about to end, and his out-of-consensus take on bonds. An essential watch for investors navigating what Rosie thinks could be the most unsettled market environment in 60 years. Recorded January 7, 2025.

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00:00 - Introduction: David Rosenberg on Markets
01:20 - Market Optimism and Pricing AI Growth
03:40 - Challenges of Forecasting in Uncertain Times
06:08 - Equity Market Overvaluation: Lessons from History
10:26 - The Case for Bonds: Why Treasuries Could Outperform
18:10 - Trump’s Policies: Potential Recessionary Impact
22:55 - Global Bond Yields and Inflation Concerns
33:12 - Europe and Emerging Markets: Opportunities and Risks
42:15 - Cash, Gold, and Defensive Strategies for 2025
55:57 - Closing Remarks: Navigating a Bog of Uncertainty

We know you get this, but gotta say it anyway - this show is for informational purposes only and is not financial advice.

#economy #marketanalysis #talkshow #marketsentiment #investing #macro #macroeconomics #podcast #talkingmarkets #maggielake #davidrosenberg #ai #bonds #trumptariffs #trumppresidency

[maggielake-talkingmarkets]

00:00 - Introduction: David Rosenberg on Markets
01:20 - Market Optimism and Pricing AI Growth
03:40 - Challenges of Forecasting in Uncertain Times
06:08 - Equity Market Overvaluation: Lessons from History
10:26 - The Case for Bonds: Why Treasuries Could Outperform
18:10 - Trump’s Policies: Potential Recessionary Impact
22:55 - Global Bond Yields and Inflation Concerns
33:12 - Europe and Emerging Markets: Opportunities and Risks
42:15 - Cash, Gold, and Defensive Strategies for 2025
55:57 - Closing Remarks: Navigating a Bog of Uncertainty

[Gnosticware]

I've been working in AI for the last 30 years. The 'AI Mania' is cyclical as it is predictable. There have been many AI booms and busts over the years. It's well known in the industry that as soon as some new technique comes out, markets boom on the hype, then crash when it fails to live up. The latest DNN's (gen AI) are impressive, well so was every other innovation in AI. But we are still far, far from making anything that is intelligent. These AI's are amazing pattern machines, but we're hitting the limits of them already IMO.

[janesmith]

I appreciate David Rosenberg's opinions. I have been incrementally and gradually shifting from equities to cash and bonds since the end of summer. I can't time the rise and fall or either bond rates or equity prices, but I became too uncomfortable with our 60% equities / 40% (cash+bonds) position. Now I am at 35% equities / 65% cash+bonds and I sleep better at night. We are retired, so we don't have salaries to boost our nest egg, but we are frugal. Like David says, everyone needs to figure out their own risk/reward balance and no should just follow along with current investing sentiment. Thanks for the helpful show.

[bmacaz]

Some strange audio feedback happening while David was speaking

[dixkrxgzf]

A conversation with Rosenberg is always a discussion with substance. Thanks!

[karlbork]

You have to give him credit. He keeps fighting.

[mjbucar]

An excellent guest speaker - thank you.

[BrainGraze]

Great interview Maggie. 👍 David is so clear and spot on on his thesis, assumptions, correlation and causation.

[techserviceondemand]

I don't think the term "investor" is applicable anymore. Gambler is more accurate (not even Speculator). Jim Bianco in one of his many appearances said over half of the options trading are same days expirations, I have not independently verified this, but I will take his word for it. Pure gambling. I know many people have Crypto, but nobody can even remotely explain how it works and what it is.

[mccannger]

Great guest! Diversification seems key to me right now... I'm at 40% stocks, 40% bonds and 20% gold. Bonds are breaking my heart right now, but their day will come...and gold should have a good 2025 IMHO.

[RWROW]

AI has been around for decades and growing more powerful as computers became more powerful and cheaper. It seems more an evolutionary technology rather than a revolutionary one, although perhaps its improvement curve is exponential and it has hit a rapid change phase. Has it really gone exponential? Why?

[bruceaulabaugh]

Microsoft Copilot's answer to my question about David Rosenberg recommending US equities:
'David Rosenberg has been quite cautious about US equities over the past five years. His general stance has been one of skepticism, often highlighting the risks and potential overvaluation in the market. For instance, in his "Strategizer" reports from 2022, he maintained an underweight position on US equities, even during periods of market sell-offs2. Additionally, in a recent interview, he discussed his continued skepticism about the stock market rally and the potential for a bubble.


It seems that Rosenberg has consistently advised caution when it comes to US equities, focusing instead on other markets and asset classes.'

[rodmeisterful]

What’s all the noise in the background?

[rglongr]

David seems defensive. It’s tough to be wrong, particularly when everything is so public. I’m on his side, he’s early, but right.

[showandtell]

What if the cost of doing business has increased... So price to earnings expansion is justified and normalized moving forward? In western countries this is the experience of small business owners: permits, red tape, first nations consultations, dei consultation, etc?

[darrenmunro]

About time David was finally proven correct! 😊

[Tn_jed]

This is the third time in my 35 year investing career where I’ve been a heavy seller of stocks. The first was late 1999 into mid 2000, the second was mid 2007 into early 2008. Don’t let anyone tell you you can’t time the markets.

[RachelCunningham-utks]

i am at the largest pension fund in the USA and uh, yeah, when David said a peak unemployment in March, that's exactly what i am waiting for to cause a market shakeup

[BA-lttx]

Luke Gromen has stated many times that "bond holders are the sucker at the poker table".
Give it another two or maybe three years and Rosenberg might be able to figure it out... :)

[hondaaccord]

My gut tells me that he will be wrong again.