Grantham: S&P 1000-1100 by Year-End — Then Trouble

GMO Chairman Jeremy Grantham released his first-quarter letter today. While Grantham reiterates some of the points GMO made in its first-quarter update (which we reviewed yesterday), he adds a good deal of new predictions and analysis, and his exceptional track record merits a quick look at some of his key points, beginning with the good news: Grantham sees it as “about 80% probable” that the massive global stimulus programs will “kick up” the economies of… Read More

Shiller: Be in Stocks & Real Estate, Despite Risks

Yale economist and housing-bust-predictor Robert Shiller says that, while housing and stock prices could well go lower in the short term, now is a good time for investors to be in both equities and real estate. “I’m less pessimistic than I was a few months ago,” Shiller told Bloomberg when asked about stocks. “The price-earnings ratio is about average, and by that you might say it sounds like one should be in the market and… Read More

Matthews: Credit Markets Show Recovery Is for Real

Jeff Matthews, the longtime money manager, told Yahoo! TechTicker today that he thinks the economic recovery and stock market turnaround may well be for real. The key to a recovery, says Matthews — who also maintains the popular “Jeff Matthews Is Not Making This Up” blog — is the credit markets. And, he says, “I think we’ve seen plenty of signs that [the credit market market turnaround] is here, and it’s for real.”

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’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.”