Equity Fund Manager Sheds Light on Recent Market Commentaries

PR Log (Press Release) – Oct 12, 2009 – Gold breaks out to a new high up 2.4%, Silver up 4.36%, the equity markets are up over 1.5%, and the U.S.$ is down another .66%.

The inflation trade is alive and well according to Bret Rosenthal, Principal of Rosenthal Capital Management, and founding partner of the Fortune's Favor Family of Funds.

According to Rosenthal, Nouriel Roubini’s recent comments about stocks rising “too much, too soon” should be put in perspective before placing any weight behind his stock market call. Rosenthal sites the following three reasons:

1.The media loves to cheer Nouriel for his historic bear call on the markets last year. What they don't tell you about his latest opinion is that he has felt the same way all year and yet the market has rallied.

2.It’s possible that Roubini may join a long list of pundits who get it right once and make a career out of the call but they don't help your investment career going forward. You see, inherent in every right market call are the seeds for failure on the next call. Successful tools that help during one market environment may not necessarily help when the environment changes.

3.The driving force behind the equity market rally may be something other than the economic turn around and if so then Roubini's call will be based on the wrong issues. Inflation is a currency event not an economic event. The more negative economic numbers come out, the longer easy credit will flow, the more the Fed will monetize U.S. debt and the U.S.$ will continue to weaken. This progression leads to an ever increasing exodus out of the U.S.$ into hard assets and equities that benefit from inflation or have a growth rate much greater than inflation.

Rosenthal feels that investors should be closely monitoring the developments involving the U.S.$ for valuable insight into the direction of both the commodity and equity markets.

“When world leaders assemble to talk about supporting a currency and the currency breaks down anyway often an inflection point is rapidly approaching. During the collapse of the British Pound in 1992, British central bankers repeatedly stressed the desire for a strong currency,” said Rosenthal.