David Rosenberg 1.1 11 ideas

Explicitly mentions liking "European aerospace defense" as a "secular trend that is not going away anytime soon." Geopolitical instability creates a floor for defense spending. European contractors (Airbus, BAE Systems) are the direct beneficiaries of increased EU military budgets, independent of US election volatility. Long European Defense majors (using US ADRs). Regulatory caps on defense profits or a sudden geopolitical de-escalation.

Rosenberg states silver has a "vertical line going up" and looks "very dangerous," while gold is "probably overdone." He explicitly advises, "If you've been in the trade... take profits." While the long-term secular bull market is intact (driven by Central Bank buying), the immediate technicals mirror the 1987 crash setup. A "very significant near-term pullback" is expected before the trend resumes. Do not chase the rally here. Wait for the correction to re-enter at lower prices. Central banks (like Poland) could announce massive immediate purchases, squeezing prices higher despite technicals.

The Schiller PE is at 40, and the equity risk premium is negative (-5 basis points) compared to the 30-year Treasury real yield. Markets are pricing equities as if they are safer than government bonds, which is a mathematical anomaly. This valuation disconnect historically precedes massive corrections (comparable to the 23% drop in 1987). The risk/reward for broad US indices is skewed heavily to the downside; the market is priced for perfection in an imperfect macro environment. A "melt-up" driven by passive flows or a Fed pivot to aggressive rate cuts could extend the bubble.

Rosenberg states, "I still like Asian equities... they still trade at much more compelling valuations," and specifically highlights that "India looks very attractive." As the US market faces valuation compression (mean reversion), capital will seek growth at reasonable prices. India offers the demographic and structural growth story without the extreme valuation premium of the S&P 500. Long exposure to India as a valuation hedge against US overvaluation. Global risk-off sentiment often drags down Emerging Markets regardless of idiosyncratic strength.

Rosenberg is long "energy infrastructure," specifically citing "revamping the power grid and pipeline expansion." The AI trade and general electrification require massive physical infrastructure upgrades. This creates steady demand for pipelines (AMLP) and utilities (XLU) regardless of the broader economic cycle. Long real assets connected to power generation and transport. Regulatory hurdles for new pipeline construction or rising interest rates hurting capital-intensive utility stocks.

He notes that "Emerging market bonds... local currency" are attractive because "the US dollar is in a bear market." If the USD weakens (bear market), unhedged local currency bonds gain value in dollar terms while offering higher yields than developed market debt. Long Emerging Market Local Currency Bonds. A sudden spike in the USD (flight to safety) would crush local currency returns.