Breakfast with David Rosenberg

(pragcap.com)The bulls enjoyed and the bears endured a massive 37% rally in the S&P 500 from the March 9th lows to the May 8th highs. Both in terms of duration and magnitude, this proved to be the most intense rally during this 20-month long bear market. And, the bounce has been so impressive that it has taken what was widely considered to be a massively undervalued stock market in early March to one that is now at least moderately expensive. (The FTSE All-World market P/E ratio on forward earnings estimates is now around 15x, well above pre-Lehman collapse levels and nearly double the lows for the cycle.)

Since the rebound from the March 9th lows was again led by the four sectors that led the decline during the bear phase – financials, consumer discretionary, materials and industrials – it stands to reason that this was just another counter-trend rally. What we know about history is that the sectors that led the downturn are never the ones to emerge as leaders in the next sustainable bull market.

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Benefits of Being Benchmark Agnostic

(firsteaglefunds.com) Excellent piece by Jean-Marie Eveillard about benchmarking and closet indexing.

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Charlie Munger's got a billion words of wisdom

(latimes.com) About an hour before Charlie Munger, the Oracle of Pasadena, is set to speak, the pilgrims start filling a ballroom at the Pasadena Civic Center.

I am one of them. As I settle in, I meet Imelda McCarthy, retired and "a bit over 21," who is here from Dublin, Ireland, and attending with her 34-year-old son, Darrach, who lives in West Los Angeles. Bush Helzberg, an investment manager, flew in with his wife from Kansas City, Mo. Michael McGowan, author of "The Guide to Gold," comes every year from just down the street in Pasadena.

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CNBC Blog from the Berkshire Hathaway Annual Meeting

Go here for live updates from the meeting

One on One with Charlie Munger, Vice Chairman Berkshire Hathaway

(www.pbs.org) SUZANNE PRATT: Warren Buffett says he wants tough questions from shareholders at Berkshire Hathaway's annual meeting tomorrow. Investors will certainly ask about the company's stock. It has tumbled more than 30 percent in the past year. Also answering questions, Charlie Munger, Buffett's business partner for half a century and Berkshire's vice chairman. Munger keeps a low profile, but today in Omaha, he sat down for an interview with Susie Gharib. She began by asking him what he'll say to shareholders tomorrow to restore confidence in Berkshire.

CHARLES MUNGER, VICE CHAIRMAN, BERKSHIRE HATHAWAY: I think the reality is that if you hold a stock for a long long term even though it's screamingly successful as an investment, you will have huge declines in the value of that stock two or three times in half a century. And I don't think that should bother long term holders all that much.

GHARIB: Mr. Munger, shareholders will certainly have questions tomorrow on why Berkshire took such large positions in derivatives especially since you and Mr. Buffett have warned for years that derivatives are dangerous investments. What are you going to tell them?


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Squawk Box Regular Gabelli Slams CNBC On Fox Biz

(clusterstock.com) Uh-oh. Will we ever see Mario Gabelli on CNBC again? During an interview on Fox Biz this afternoon, Liz Clayman asked him what the #1 mistake investors were making.

His answer: It's fairly simple, they listen to CNBC all day and panic.

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Marry a Farmer

(Newsweek.com) Jim Rogers, the legendary American investor, financial commentator and, along with George Soros, founder of the Quantum Fund, is the ultimate commodities bull. More than 10 years ago, he started the Rogers International Commodities Index, and in 2005 he wrote "Hot Commodities: How Anyone Can Invest Profitably in the World's Best Market." Below, he explains to NEWSWEEK's Rana Foroohar why oil is still black gold.

Foroohar: Inflation-adjusted, oil is the same price that it was in 1976, and in 1870. So why are you still a bull?
Rogers: It doesn't matter. It's also true that just about any stock you can think about is at or below where it was in the 1970s right now. So what? There are still 15- to 20-year periods when commodities, stocks and any other asset class goes up a great deal. In 1987 stocks collapsed by 40 to 80 percent. But people who were smart enough to stay in them made 1,000 percent returns in the next decade. The point is to take advantage of those periods and make some money.

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