David Rosenberg on ‘Seismic Investment Shift’: Wealthtrack Preview

This weekend’s Consuelo Mack WealthTrack reveals a “Seismic Investment Shift!” —premiering nationwide beginning Friday, October 11 at 7:30 p.m. on public television (check local listings**) and on wealthtrack.com. Influential economist and WealthTrack “Financial Thought Leader” David Rosenberg (Gluskin Sheff, formerly Merrill Lynch) explains why he now predicts inflation will rise, bonds will suffer, and the changes this will bring to the economy and markets.Perhaps the most controversial aspect of his new position is his outlook for jobs and wages.

 David Rosenberg on 'Seismic Investment Shift': Wealthtrack Preview

David Rosenberg preview video embedded below

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In this video, David Rosenberg tells WealthTrack Anchor and Executive Producer Consuelo Mack:

“As capacity is drained out of the labor marketthe price response will be in the form of higher wages. I find it very interesting that, you take a look at this cycle, companies have tremendous cash; there are competing demands for that cash, you know — dividend payouts, a nice story for the stock market, stock buybacks, nice story for investors — but yet, they haven’t had to pay their working class. But I think that we are going to see a shift in that direction.”

Other WealthTrack David Rosenberg interview highlights:

*The Fed is on a different path than it has taken in the last three decades: “The Fed is always fighting the last war. They fought the inflation war. Now they’re fighting the deflation war. They’re fighting the last war. But they want to generate inflation. They’re telling you we want inflation up to two-and-a-half percent. And they want lower unemployment. Yes. But the thing is that it was always about price stability. I’m trying to say that is no longer the case. They’re saying two-and-a-half percent, and then probably it’s going to be two-and-a-half percent, plus something,” says Rosenberg.

*Rosenberg predicts who will benefit from this change in policy: “who benefits from a steeper yield curve are the banks, because they get wider net interest margins. Insurance companies, which got beaten up so badly by ever-declining interest rates, they’re going to be doing better.Financials will be a good place to be. I would say certainly better than the utilities and the other classic rate sensitives, but the banks will have wider net interest margins, so I think that’s going to be good for their business. What else? Well, let’s say that you want to have inflation hedges in there. I think down the road basic materials will be a good place to be.”

Rosenberg recently reversed that two-decade long call

Prior to his current role as chief economist and strategist at Toronto-based wealth management firm Gluskin SheffDavid Rosenberg was for many years the chief North American economist at Merrill Lynch, where he famously predicted the housing boom and bust, as well as the last 20 years of falling inflation and rising bond prices. Much to the amazement of his followers, Rosenberg recently reversed that two-decade long call.