Commentary

Let The Wild Rumpus Begin

All 2-sigma equity bubbles in developed countries have broken back to trend.

Commentary

Japan Equities: Entrenched Perceptions Ignore Improving Reality

Most global equity managers today are underweight Japan.

Commentary

3Q 2021 GMO Quarterly Letter

This quarterly is a piece written by my Asset Allocation co-head John Thorndike. In it, he explains the rationale behind our strong preference for non-U.S. stocks despite the stellar performance the U.S. stock market has delivered over the last decade. The research behind the piece is an example of the bread and butter of our historical asset allocation analysis.

Commentary

Value Traps vs Growth Traps: Value Traps Exist, But Growth Traps Are More Insidious

A new piece from the GMO Asset Allocation Team discusses value traps, growth traps and which are worse for investors.

Commentary

Wounds That Never Heal

GMO Asset Allocation team presents a chart of four major U.S. equity bubbles dating back to 1929, illustrating just how long it really takes for investors to climb back to historical levels of return.

Commentary

“Growth Bubble: Making Money on Companies That Make No Money”

GMO Asset Allocation Team examines the fact that although every bubble is unique, classic common threads also run through everyone.

Commentary

Part 2: What To Do In The Case Of Sustained Inflation

We have a relatively sanguine view on the likelihood of inflation becoming ingrained in the system (much as it pains us to agree with the Fed). However, the dark arts of macroeconomics are notoriously tricky, and we have often talked of the need to build robust (as opposed to optimal) portfolios – effectively, portfolios that can withstand multiple outcomes.

Commentary

2Q 2021 GMO Quarterly Letter

After several strong quarters for value stocks, the last few months have seen a sharp reversal in favor of growth.

Commentary

Part 1: Inflation – Tall Tales And True Causes

Inflation is often a poorly understood concept, with monotheistic explanations abounding.

Commentary

The Best 3-year Period For Value Vs. Growth Also Suffered Some Of Its Worst Drawdowns

The Value vs. Growth reversal, which started in earnest in the late Fall of 2020, generated exciting returns for many of our portfolios through May.

Commentary

GMO 7-year Asset Class Forecast: May 2021

The GMO Asset Allocation Team has released its latest 7-Year Asset Class Forecasts through May 2021 (click to view online or see chart below).

Commentary

Quality Investing And Inflation

With inflation spiking as the world adjusts to the post-Covid regime, investors are naturally interested in how their portfolios might perform in an inflationary world.

Commentary

There Are No Bad Assets…Just Bad Prices

In a new Insights piece, GMO’s Asset Allocation Team addresses a common response to bearishness in the current markets.

Commentary

GMO Quarterly Letter: Speculation and Investment

Speculative booms provide both entertainment and outsized profits while they are happening, but they do generally burst painfully,” Inker writes. “Speculative booms provide both entertainment and outsized profits while they are happening, but they do generally burst painfully. This is particularly true in equity markets, where the demand growth is ordinarily met with increased supply from savvy capitalists. Maintaining excess demand in the face of growing supply becomes ever more difficult and eventually proves impossible.

Commentary

A Year Of Investing In Quality Cyclicals

April 3rd marked the 1-year anniversary of the first investments deployed by GMO’s Quality Cyclicals Strategy,1 within a fortnight of the trough that ended 2020’s quickfire bear market.