Excellent note here from David Rosenberg this morning. 80% of all economists now agree that the recession is over. All of this is in the midst of the largest recovery rally of all-time. Investors looking for a contrarian position might have found the ultimate one here. A consensus agreement that the recovery is intact and a market that is potentially overbought:
More than 80% of the economics community, according to the Investor’s Business Daily, believe the recession has ended. That is what we call a consensus. Now to be sure, it is not at all uncommon to have the stock market bottom in advance of the economy turning the corner — it occurs 99% of the time. But never before has the S&P 500 jumped over 50% from the low to the end of the recession — the pre-expansion rally from the low is normally 20%. By the time we are up over 50%, the economy is well into it second year of recovery.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.