GMO: International Equities Promising, Govt. Bonds Dangerous

Jeremy Grantham’s GMO has released its first-quarter 2009 update, and the firm says it will continue to put money back into equities, though with a cautious approach. “Having increased our exposure to equities last quarter, we kept to our game plan and gingerly shifted our stance toward favoring riskier asset classes,” GMO states. “Our concern about the broader economic picture, however, prevented us from deploying toward more speculative areas of the market, and we did… Read More

Buffett Talks Recovery, Bonds, and Banks

A myriad of Warren Buffett-related headlines have been coming out of Berkshire Hathaway’s annual meeting, ranging from Buffett’s thoughts on the economy to Berkshire’s succession plans to just what Buffett’s mood is these days. Among the more relevant stories is Buffett’s latest take on the economy, which he tells CNBC is “slow, very slow, and at the moment, still getting slower.” Buffett says we’ll see more unemployment in the short term and inflation in the… Read More

Gross on Haircuts, Shared Burdens, and those Green Shoots

In his latest Investment Outlook column on bond giant PIMCO’s web site, Bill Gross says that the recent crisis — and the government’s response to it — has changed the financial landscape, and that investors must be cognizant of the new economic and investing world that has been created. President Obama’s comments on the recent bankruptcy announcement of Chrysler, Gross says, have highlighted Obama’s populist streak. And, while he doesn’t seem to be criticizing that… Read More

Gabelli and Munger on the Economy, Markets

“Woodstock for Capitalists” — the annual meeting of Warren Buffett’s Berkshire Hathaway — has been going on throughout the weekend in Nebraska, and Buffett’s comments have already made a lot of headlines. (More on those comments later today.) But Buffett isn’t the only one dishing out pearls of investment wisdom at the Omaha event. In separate interviews with CNBC, Mario Gabelli and Berkshire Vice Chairman Charles Munger — two Buffett fans who have compiled tremendous… Read More

Kass: S&P 1,050, Then a Pullback

TheStreet.com’s Doug Kass — whose early March bottom call continues to hold up — today offers a much more long-term outlook on the stock market. According to Kass, history — namely that of the 1930s and 1970s — shows that we could see a continued big push in stocks until late summer, at which point we’ll see a sharp decline and then a period of several years of sideways action.

The Bond Fallacy

The bond bandwagon has gotten pretty crowded these days, with big names like Rob Arnott and Gary Shilling both writing that bonds — not stocks — appear to be the best long-term investment vehicle. In his Return on Investment column for The Wall Street Journal, however, Brett Arends counters the arguments that the bond proponents (and in particular Arnott) have been raising. “Obviously bonds, especially Treasurys, held up well during last year’s crisis,” writes Arends.… Read More

BlackRock’s Doll: S&P Earnings Estimates Too Low; Market Bottoming Process Ending

BlackRock Vice Chairman Bob Doll tells CNBC that, while the economy isn’t good, “some [analysts] have gone too far to the negative side,” and says that those analysts who have estimated $40 in per-share S&P 500 earnings for 2009 “are going to have to raise their numbers.” “Two months ago, it looked like a black hole,” Doll said. “Now, we have a much more balanced picture.”

Wharton Prof Duel: Siegel vs. Stambaugh

Several weeks back we highlighted a new study that found stocks are actually more risky in the long run than they are in the short run. Today in an interview posted on the University of Pennsylvania’s Knowledge@Wharton web site, two Wharton School professors — Robert Stambaugh, one of that study’s co-authors, and Jeremy Siegel — talk about many of the issues the study raises for stock investors, as well as the current market conditions. Among… Read More

Yardeni’s 12 Reasons for Optimism

Yes, the news this morning is filled with swine flu and a bigger-than-expected first-quarter GDP drop, but Ed Yardeni of Yardeni Research — who has a pretty good track record of economic forecasting, including his solid calls on the last recession recovery in 2003 — is offering several reasons for economic optimism. (A tip of the cap to The Wall Street Journal’s David Wessel for highlighting this.) In an email to clients, Yardeni cited a… Read More

The Great Depression “25-Year Recovery” Myth

If you’re worried about stocks taking a period of many, many years to recover following the recent market plunge, Mark Hulbert offers some insightful — and encouraging — news in The New York Times. While many have cited the fact that the Dow Jones Industrial Average took 25 years to get back to its pre-Great-Depression highs as reason to worry that the coming market recovery could take a upwards of 10 or even 20 years,… Read More