Orientation to the weather or wear of flat sawn boards has advocates for both sides. I was taught bark side, if I remember correctly Audel's was bark side, the following link to "Wood Properties Affecting Finish Service Life" from FPL is bark side. http://www.fpl.fs.fed.us/documnts/pdf2000/willi00a.pdf

From page 6, "Perhaps the greatest difficulty asso-ciated
with the use of flat-grained lum-ber
is the increased potential for grain
raising and grain separation (Figures 9a
and 9b). Raised grain, which results in a
corrugated appearance on the surface of
flat-grained lumber, usually occurs when
the harder latewood portion of each an-nual
growth ring is projected above the
level of the softer earlywood. This usu-ally
occurs when dry flat-grained lum-ber
is allowed to pick up moisture. When
the interface between the latewood and
earlywood becomes loosened, the result
is separated grain, also known as loos-ened
grain, shelling, feathering, or lift-ing
of the grain. Raised or separated
grain is much more pronounced on the
pith side than on the bark side of flat-grained
lumber. The primary method of
preventing problems with grain separa-tion
is to orient the bark side rather than
the pith side of the product to the
weather."

Sapwood can be a major portion of a flat sawn board or shingle, likewise juvenile wood should be avoided in exterior exposed boards or shingles.

Research during the past 30 years has given about a 9mm/century erosion rate to w. red cdar on a vertical test fence. On an 45 degree inclined test fence facing south erosion rates double on most wood species. The thickest part of the standard #1 perfection shingle is 45/100 in.

Wood shingles yield a limited life span, high maintenence and expensive roof. I would look for alternatives.