Gurus Still Keen on Blue Chips

A number of top value investors are continuing to see big bargains in big blue chips. Among them: money manager and columnist Whitney Tilson. “If you’re worried about a feeble economy you want to own companies with strong balance sheets,” Tilson says, according to the Associated Press. Tilson doubts the broader market will do much for a while, but he’s snatching up shares of large multinational firms. Such big, well-known firms often command a premium,… Read More

Hulbert Examines Presidential Election Year Cycle

In his latest column for MarketWatch, Mark Hulbert  offers some interesting — and encouraging — data involving the “Presidential Election Year Cycle”. According to the PEY Cycle, the third year in a president’s term is often the best for the stock market. (President Obama’s third year would thus start at the end of the current quarter.) Noting that some top bearish strategists, including Jeremy Grantham, have cited the cycle as reason to expect gains for… Read More

Grantham on Deflation, and the Remarkable Cheapness of High-Quality Stocks

While many remain concerned that major inflation is lurking around the corner, GMO’s Jeremy Grantham says deflation, not inflation, is the greater concern. “Even if we get intermittently rising commodity prices, which seems quite likely, the downward pressure on prices from weak wages and weak demand seems to me now to be much the larger factor,” Grantham writes in his latest quarterly letter. “With weak loan supply and fairly weak loan demand, the velocity of… Read More

Grantham: Stocks Still Above Fair Value

While stocks are down some 14% off their April highs, GMO’s Jeremy Grantham says they are still well shy of fair value territory. In an interview with CBS MoneyWatch, Grantham says he puts fair value for the S&P 500 somewhere between 800 and 875. (The upper bound of that range is almost 20% below where the index stood as of Wednesday afternoon.) “There’s a veneer of confidence that’s not as thick as it looks,” Grantham… Read More

Berkowitz, Grantham, Other Gurus Offer Top Picks

Fortune magazine is running a special issue this month on how to “Retire Rich”, and one particularly interesting piece involves 25 stock picks from 25 investors with strong track records, including Bruce Berkowitz, Jeremy Grantham, and David Herro. Here’s a sampling of some of these gurus’ top picks: Chuck Akre: Akre, who now runs his own fund, averaged 12.6% annual returns for the FBR Focus Fund from 1996-2009. He’s high on convertible preferred shares of… Read More

Grantham Bullish on Timber — and Little Else

Jeremy Grantham has been sounding bearish lately, but at least one type of investment is piquing his interest: timber. Crain’s New York Business reports that Grantham, speaking at the CFA Institute’s recent annual conference, told onlookers that timber is currently his favorite investment choice. Grantham sees timber rising about 6% per year over the next several years, Crain’s reports, a much higher figure than he’s expecting from most types of equities. “Emerging markets are heading… Read More

Top Fund Managers Look to Large Caps

Jeremy Grantham isn’t the only successful investor who’s finding big values in big stocks. Thomas Perkins and Donald Yacktman are among the investors with strong long-term track records now finding good buys in large-cap stocks, BusinessWeek reports. Perkins, whose Perkins Investment Management Mid-Cap Value fund has outperformed its peers by more than 4 percentage points over the past decade, says that large caps “have gotten so cheap that they should outperform for the next several… Read More

Grantham: Stocks Overpriced, but (Unfortunately) Likely to Rise

In his latest quarterly letter, GMO’s Jeremy Grantham says stocks are overvalued, but likely to continue rising — and rising to dangerous “bubble” levels if the economic recovery is a slow one. “Even though I guessed last April that we would have a quick rally to 1100, this looks quite likely to be far more,” Grantham writes, saying that the government’s bailouts of failing firms, huge deficit-spending, and low interest rate policy have encouraged large… Read More

Grantham Talks Valuations, Bubbles

Jeremy Grantham says the U.S. stock market is now “thoroughly expensive” — except for one subset of the market — and also says he sees more bubbles forming in various parts of the globe. In an interview with The Financial Times, Grantham says stocks have moved from being very cheap to being expensive in the U.S., with the exception of big, well-known blue chip franchises like McDonald’s and Coca-Cola. Grantham says the rally has been… Read More

Grantham Says Market Overpriced, But Likely to Rise

In his year-end letter, Jeremy Grantham says that equities are once again significantly overpriced, and that investors haven’t learned the lessons of recent market crashes. But, he adds, stocks will likely head higher in the short term. “All investors should brace for the chance that speculation will continue for longer than would have seemed remotely possible six months ago,” writes Grantham. ” I thought last April that themarket (S&P 500) would scoot up to 1000… Read More