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Jeremy Grantham Interview


Guest kumar
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Grantham accuses Fed for creating bubbles one after the other instead of preventing them. Now, this disease is spreading to emerging makets. He recommends keeping cash (comes in handy when stocks and bonds burn down), stocks like Ko, JNJ (if forced to buy at gun point), emerging markets (still offers value?). Is he frustrated and confused? Who is not?

 

http://www.cnbc.com/id/15840232/?video=1640401359&play=1

 

 

 

 

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Very noticable is the distinction in timing; < 2yrs, & > 6-10yrs with different strategies for each.

 

Overweight cash by repaying/terming out debt (ie: FFH), buying back shares (ie: FFH buy-ins of minority positions), or returning original capital (ie: Klarman/Baupost). Get that cash by selling into the rally, & selling puts (ie: FFH CDS swaps & S&P hedges) to profit on the way down. Cash is off BS - via a stronger financial position & exchange traded derivatives (with the fed indirectly backing the exchange). Add to the minority stakes in the developing world by using the exit disruption generated from hot vs cold money arbitrage. Elegant.   

 

If you can buy cheaply & hold, renewable commodities are clearly where it is at (ie: FFH holdings of FBK & Abitibi). Explains the FFH approach over FBK & early last years decision to learn the oil/gas business. 

 

SD

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