On the other hand, Rosenberg contends that inflation will be Federal Reserve chair Janet Yellen's legacy, as she continues Ben Bernanke's record-low interest-rate policy.
In recent weeks, Rosenberg has argued that the Fed's continued "easy money" policies are misallocating investments: Instead of plowing money back into their businesses for the future and creating jobs, companies are borrowing cheap funds to buy back their own shares.
With the U.S. economy and employment recovering, albeit at an anemic pace, Rosenberg now foresees a slow growth-plus-inflation scenario in years to come - known as "stagflation."
"The Federal Reserve monetary spigot is still open as inflation pressures become more apparent," Rosenberg argues. "This Fed will not make a preemptive strike to ensure price stability but is instead falling behind the curve." This should prompt buying "hard assets," Rosenberg advises. Hard assets include investments such as precious metals and real estate.
Speaking of real estate, Bill Feingold's Hillside Advisors L.L.C., based in Valhalla, N.Y., thinks there is an investment opportunity in home builders. Following is a list of smaller home builders, besides Lennar (LEN) and Toll Bros. (TOL), the upper-end home builder. Feingold believes that these names offer better value.
The Ryland Group (RYL) is focused on entry-level buyers. It has been consistently profitable through most of the recent deceleration in the industry, and has recorded healthy new contract closings despite a lackluster first quarter for housing.
Meritage Homes (MTH) is focused on high-growth geographic areas of the country, and has cash flow and a balance sheet strong enough to promote growth. Finally, M/I Homes (MHO) is focused on entry-level buyers.