Parsad Posted January 25, 2010 Posted January 25, 2010 Grantham Mayo's 4th Quarter Letter is out. Always a good read! Cheers! http://www.gmo.com/websitecontent/JGLetter_ALL_4Q09.pdf
oldye Posted January 26, 2010 Posted January 26, 2010 He says something truly profound like "What hope do we really have in making accurate predictions of how the world will recover from all of this, and in what ways it will be changed? Very little." The very next sentence is "My view of the economy’s future is boringly unchanged: “Seven Lean Years.” I still believe that after the initial kick of the stimulus, we will move into a multi-year headwind as we sort out our extreme imbalances. This is likely to give us below-average GDP growth over seven years and more than our share of below-average profi t margins and P/E ratios" For someone that says its very difficult to make correct top down predictions he sure as heck seems to base his investment strategies around them. "So all investors should brace for the chance that speculation will continue for longer than would have seemed remotely possible six months ago. I thought last April that the market (S&P 500) would scoot up to 1000 to 1100 on a typical relief rally. Now it seems likely to go through 1200 and possibly higher. The market, however, is worth only 850 or so; thus, any advance from here will make it once again seriously overpriced,"
philassor Posted January 26, 2010 Posted January 26, 2010 Thanks for the link: I am starting to like that fellow; brainy and insightful. Very impressive 1999-2009 forecast. The united corporations of america: priceless ( he stole it from me ;)) the terrible ratio of heath care cost to longevity compared to the insured world median: worth emphasizing. Finance as a drag to GDP: illuminating.
QLEAP Posted January 26, 2010 Posted January 26, 2010 Thanks for posting this. His letters are funny at times correlating Presidential cycles to the market but he has been bang on in terms of market forecast from what I understand. The Wealthtrack podcast with Grantham is also very good - http://wealthtrack.libsyn.com/index.php?post_id=405724
goldfinger Posted January 26, 2010 Posted January 26, 2010 Oldye, That was my first reaction a while ago, but then if you take into consideration the amount of capital he has under management, his approach may make more sense. He is rather talented at what he does...
Guest dealraker Posted January 27, 2010 Posted January 27, 2010 Grantham nuts? Check out his investment record: BRILLIANT! Some criticize him for staring at the floor or at the table top. I don't care if he's sitting there cross-eyed. With his success in predictions I'm gonna listen.
twacowfca Posted January 27, 2010 Posted January 27, 2010 He says something truly profound like "What hope do we really have in making accurate predictions of how the world will recover from all of this, and in what ways it will be changed? Very little." The very next sentence is "My view of the economy’s future is boringly unchanged: “Seven Lean Years.” I still believe that after the initial kick of the stimulus, we will move into a multi-year headwind as we sort out our extreme imbalances. This is likely to give us below-average GDP growth over seven years and more than our share of below-average profi t margins and P/E ratios" For someone that says its very difficult to make correct top down predictions he sure as heck seems to base his investment strategies around them. "So all investors should brace for the chance that speculation will continue for longer than would have seemed remotely possible six months ago. I thought last April that the market (S&P 500) would scoot up to 1000 to 1100 on a typical relief rally. Now it seems likely to go through 1200 and possibly higher. The market, however, is worth only 850 or so; thus, any advance from here will make it once again seriously overpriced," Nuts? By no means! Fortune tellers always hedge their prognostications. Neverless, he's in the 95th percentile. :)
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