Buffett, Whitman, Grantham & Others Weigh In

Kiplinger’s recently asked six top strategists to give their take on investing and where the markets are headed from here. A sampling of the responses:

Warren Buffett: While he says he has no idea where stocks will head in the short term, Buffett says that “over a ten-year period you will do considerably better owning a group of equities than you will owning Treasuries. In fighting the economic war, we’ve taken action that sows the seeds of substantial inflation down the road. Not in the next six months or year, but ten years from now the dollar will buy a lot less than it buys today.”

Bob Rodriguez: The chief executive officer of First Pacific Advisors says “don’t run with the herd. Being surrounded by people who are doing the same thing as you offers a false sense of protection. He recommends short-maturity, high-quality debt on the bond side, and says that if the U.S. government keeps increasing its balance sheet through huge deficits, “you should probably move at least 20% to 40% of your assets out of the U.S.”

Jeremy Grantham: The GMO chief investment strategist says that if you’ve missed the junk rally, “don’t compound the damage to your portfolio by chasing gains in risky assets. We’re at the beginning of a seven-year period of lean returns.” He recommends buying only the most attractively valued, highest-quality blue-chips.

Marty Whitman: The co-chief investment officer of Third Avenue Management says to “find extremely well-financed companies that do not rely on continuous access to the bond or stock markets for refinancing, that are run by competent management teams and that have favorable prospects for growth.” Buy those issues when they’re trading at a discount. “All other systems of investing are concerned with predicting stocks’ near-term price movements,” he says.

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