The bear case for equities has ebbed, offering selected opportunities for stock pickers, strategist David Rosenberg said Tuesday.
"I would say that our asset mix would have us just over 50 percent weighting toward equities," said Rosenberg, Gluskin Sheff's chief economist. "But we're finding there's increasingly less value in the bond market, even the high-yield market, which was acting as a very nice surrogate for equities for so long."
Cash, meanwhile, is providing a negative real return, he added.
On CNBC's "Fast Money," Rosenberg said he expected growth in the industrials sector, technology and large-cap exporters.
"There are some opportunities in the stock market," he said. "I can understand that there are lean pickings."
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Rosenberg said he had believed the economy would struggle more than it has.
"It's not about fighting momentum," he said. "It's really understanding that we passed a very important litmus test this year for the U.S. economy. We had arguably the third-most stringent year in terms of fiscal restraint on record, and we survived. It's not a strong year for the economy. …
"But the underlying momentum in the private sector, I would submit, is probably better than I thought it was 12 months ago."
Rosenberg's bullish tack reportedly riled longtime investors, according to a Wall Street Journal story this week titled, "Top Bear's Bullish Tilt Has Followers Growling."
While Rosenberg said in 2010 that the U.S. economy was in a 1930s-style Depression, not a recession, he has grown more positive on the market this year.
"I'm finding out that a lot of my loyal readers were never really interested in my analysis," he told the Journal. "I spent over 10 years battling the reputation of being a radical permabear. Now I make a subtle shift and I'm fighting the perception that I'm a permabull."
On CNBC, he said he was merely interpreting the data.
"It's a matter of doing your analysis, really looking at the forest past the trees and ignoring the noise," he said. "I've always just followed my own analysis."
Rosenberg said that "the probability curve around the outlook for the economy and the stock market" was a lot wider than he had previously thought.
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But he added that the investment climate was broader than news headlines suggested.
"There have been and remain ways through diversification that you can generate risk-adjusted returns throughout the entire capital structure of any given company," he said. "Are we fully invested? Yes. Does it mean that we're 80 percent equities? No. But, have we been raising our equity weightings alongside my view that recession risk over time are coming down? The answer is yes. That's exactly what we're doing."