Grantham on a Low-Growth, Overpriced Environment

Equities and other assets have become overpriced (to varying degrees) just about everywhere you look, GMO’s Jeremy Grantham says in his latest quarterly letter. “Courtesy of the … Fed[‘s] policy, all global assets are once again becoming overpriced,” writes Grantham. “But, as always, asset prices are not uniformly overpriced: emerging markets and, we believe, Japan are only moderately overpriced. European stocks are also only a little expensive, but in today’s world are substantially more risky… Read More

Siegel Counters Grantham on Profit Margins, Zero Growth

Wharton Professor and author Jeremy Siegel was pretty accurate with his 2012 market call, and he thinks 2013 is going to be another solid year for stocks. “We’re going up,” Siegel tells Robert Huebscher on Advisor Perspectives. “We could get another 15 to 20%. I’m on record saying that I think there is an overwhelming probability that we’re going to get Dow 15,000 by the end of next year, so if the current level is… Read More

Slow Growth Here To Stay, Says Grantham

GMO’s Jeremy Grantham says those waiting for the U.S. to return to the 3%+ growth rates it has averaged over the past hundred years are going to be disappointed. “The U.S. GDP growth rate that we have become accustomed to for over a hundred years … is not just hiding behind temporary setbacks,” Grantham writes in his third-quarter letter. “It is gone forever. Yet most business people (and the Fed) assume that economic growth will… Read More

Grantham Keeping Head Down Amid Headwinds

In an interview with Charlie Rose for Bloomberg BusinessWeek, GMO’s Jeremy Grantham says he’s going to be quite cautious in 2013. “I am going to be careful, particularly for the first half of next year,” Grantham says. “Great brands of blue chips are not so bad in the U.S. Emerging countries are about fair price. Beaten-down European stocks, particularly the so-called value stocks, are probably a little cheap, although risky. And resource stocks, once they… Read More

Grantham: Act Now, Or Food Crisis Could Be Devastating

GMO’s Jeremy Grantham says the world is well into a food crisis that isn’t likely to abate, and that it will have huge sociological, governmental, economic, and investment repercussions. “We are five years into a severe global food crisis that is very unlikely to go away,” Grantham writes in his latest quarterly letter on GMO’s site. “It will threaten poor countries with increased malnutrition and starvation and even collapse. Resource squabbles and waves of food-induced… Read More

Grantham: U.S. Stocks Aren’t Cheap, But International Stocks Look Okay

GMO’s Jeremy Grantham says that U.S. stocks are not cheap, as many believe, but that international equities are looking more attractive. “You’d lose a ton in U.S. small caps; but international small caps are fairly priced — right on the nose,” Grantham said at the Morningstar Investment Conference, CNBC reports. “If you put together a respectable portfolio of international stocks, you’d do much better.” In particular, he likes resource-related stocks like energy, metals, and food… Read More

Grantham on Incredibly Irrational Markets

In his latest quarterly letter, GMO’s Jeremy Grantham offers some very interesting data on the disconnect between the stock market on one hand, and the economy and “fair value” of the stock market on the other. “This difference is massive — two-thirds of the time annual GDP growth and annual change in the fair value of the market is within plus or minus a tiny 1% of its long-term trend,” Grantham writes in the letter,… Read More

Grantham: Investment Outlook “Not Bad At All”

GMO’s Jeremy Grantham has released his fourth-quarter letter, and, while the often-gloomy strategist focuses a good deal on the troubling flaws of the existing capitalist system, his investing outlook paints a fairly attractive picture. “The majority of global equities are within spitting distance (a technical term) of fair value,” Grantham writes. “Only the S&P 500 is materially overpriced, with an imputed return on our 7-year forecast of about 1% real, and because the high quality… Read More

Grantham’s Firm Sees “Mother of All Bubbles” in China

Jeremy Grantham’s firm is taking a very bearish stance on China, believing the country is in a huge infrastructure and real estate bubble. “China is experiencing the mother of all bubbles,” Peter Chiappinelli, portfolio strategist at Grantham’s GMO, says, according to “We don’t know when it’s going to pop or what’s going to cause it to pop, but there’s very little track record of countries successfully navigating a soft landing out of a bubble.”… Read More

GMO High on Quality & Value, Sour on Bonds

Jeremy Grantham’s GMO has published its fourth-quarter update, offering a contrarian position on Europe and outlining its strategies as we head into 2012. The firm says it moved “incrementally into Europe” in the fourth quarter of 2011, adding. “Selectively, slowly, prudently, of course, but the general belief is that markets have overreacted, and this always presents some opportunities.” GMO says the move was “by no means a ‘call’ on the bottom of possible European corrections… Read More