When the last bear turns bullish is it time to get out?

Famously bearish economist Stephen Roach has suddenly turned bullish on the world economy, as have plenty of others. But what does this mean for your investments?

"When the last bear turns bullish, it's time to get out," says Nils Pratley in The Guardian, referring to the revelation that Stephen Roach, Morgan Stanley's famously gloomy chief economist, suddenly has a spring in his step.

"I am now feeling better about the prognosis for the world economy for the first time in ages," says Roach in his latest research note. After several years of dire warnings about global trade imbalances and the US current-account deficit, signs that central banks are adjusting liquidity and the IMF and G7 are serious about tackling imbalances have won him round to a semi-bullish position. But not everyone is encouraged by this sudden conversion. "You have to admire the bravery of the call, given that Roach admits the last time he was so optimistic was 1999," says Pratley.

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