Nouriel Roubini still sees a gloomy worldand it's hard to argue against his belief that there are structural problems in the world's economies.
Still, his view is less collapse focused and more of a dead economy perspective.
This is a sentiment change in my view and reflects indications that the golabl economy avoided a more dire implosion outcome.
Not exactly time to celebrate, but some breathing room anyway.
Even for strategists more bullish than Roubini, it's clear that a more cautious perspective in the investment world is here to stay . In the last 10 years we've been through a disputed presidential election, the dot com crash, the real estate disaster, the collapse of banks, the Great Recession, questions about the euro's solvency, and 100 other dire events that have caused the investment community to realize this lesson; risk exists and cannot be ignored by overly optimistic assumptions and hopes. Yes, prudence is making a raging comeback.
This change in view is reflected in media headlines.
Yes, there are still articles written about the next hot stock or a break out move in the markets that will surely make you rich once again.
But more so, headlines describe a muddled picture and a struggling economy that suggests that the days of black-and-white euphoria have passed like so many drifting clouds.
While this might seem depressing, in our view it's realistic to have a perspective where gloom competes with euphoria. One only needs to look at earnings calls from companies like Cisco to see that even corporate America is becoming more cautious. Microsoft , with its billions of dollars in cash, has adopted an investment philosophy for their coffers that assumes a very sluggish and slow growth economy. Corporate America is convinced the oh so happy days are not here again.
As an investment strategist, I am viewed as a pretty depressed optimist. I don't believe the world is ending and that an economic recovery is plodding forward but, at the same time, believe that it will be three steps forward and two and a half steps back. That formula yields a half step ahead which is better than nothing (but not by much). I'd like to think differently, but frankly I think this is the likely future.
We are in an age where risk has now caught up to optimism. A generation of investors have been burned and abused and simply can't take more empty promises and hopes of untold riches based on the next great investment idea. Yes, there are opportunities to be found but they will likely be overshadowed by more realistic return outcomes.