I try to select stocks without making too many asumptions about the economy. However, I wonder if one can't ignore the economy for certain sectors. For example, you cannot just buy homebuilders without some feel for how the economy is going to behave. Well, I suppose you could but really the earnings of home builders for the next five years will be greatly affected by whether or not the US sinks into a recession and whether this pulls the rest of the world along. Even more so for banking which is more highly leveraged.
Buffett always claims to ignore the economy but I am not sure that I believe him. He seems to have avoided many of the past recessions. I suppose he would claim that it was simply over-valuation that tipped him off and not the economic outlook. Recently he has been outspoken about the fact that the US dollar must decline. That is pretty macro for Buffett.
Perhaps it is best to go against the prevailing view of the economy. For example it is probably true that people overestimate economists ability to predict the direction of the economy. If so then the prevailing view will have biased valuations in that particular direction. If so, then then market is not exactly macro-efficient but rather macro-biased. There must be money to be made simply by ignoring the popular economic view and insisting that we know nothing of the where the economy is going. Just use prior information not posterior information (in Bayesian language). I think the same principle applies to microeconomics. Ignore the analysts and just look at past earnings, histoic ROE and use common sense. If analysts are pessimistic then you have a buying opportunity because the market will discount their bogus information. This is probably the guts of contrarian stock picking. But is it right?
