In the ever-evolving landscape of global finance, it’s tempting to assume the fundamental rules of investing remain unchanged. But according to David Rosenberg, founder of Rosenberg Research and one of the most respected macroeconomists on Wall Street, the market of 2025 isn’t quite playing by the old rules anymore.
In a recent interview with Erik Townsend, Rosenberg offered a sweeping critique of the current state of the U.S. financial markets. His central thesis? Fundamentals no longer drive markets like they used to. Instead, investor sentiment, confidence in earnings projections, and the allure of momentum are doing much of the heavy lifting — and that’s deeply problematic for long-term investors.
Fundamentals vs. Multiples: The Shift in Market Drivers
Rosenberg isn’t saying that fundamentals have disappeared — they still matter — but their weight in market pricing has diminished. At the heart of his concern is the price-to-earnings (P/E) multiple, which investors use to value stocks.
Historically, stock prices have been anchored by two variables: corporate earnings and the multiple investors are willing to pay for those earnings. Rosenberg notes that while earnings grow slowly over time, multiples can swing wildly — “like Bitcoin,” as he put it.
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