In the latest GMO Viewpoints -- "Bracing Yourself for a Possible Near-Term Melt-Up" -- Jeremy Grantham has a warning for bubble watchers: the next phase in this long-running bull market may be even more dizzying gains. Among the factors Grantham considers are the acceleration of price, increasing concentration like that in tech "winners," outperforming quality and low beta stocks and the role of the Fed in recent bubbles.
In a new quarterly letter to GMO's institutional clients, head of asset allocation Ben Inker discusses why investors should be thinking about the risks of surging inflation, even if such a surge may not be inevitable or even probable. Chief investment strategist Jeremy Grantham considers the current market environment and how to most rationally take risk with the ultimate stakes on the line.
The steady bull market—now the second largest—continues. The Dow just had its third nine-day win streak of 2017, which hasn’t happened within a single year since 1955. Can the rally continue? While longer-term technicals do look very healthy, a closer look suggests that it has been a historically long time since even a modest correction, thus increasing the chances of a rise in volatility soon.
In a new white paper, “The Good Thing About Climate Change: Opportunities,” GMO’s Lucas White and Jeremy Grantham discuss the growing problem of climate change, the exciting investment possibilities in companies combating that peril and the best ways for investors to approach the opportunity.
Emerging Value and Margin of Superiority by Ben Inker and Why Are Stock Market Prices So High? by Jeremy Grantham
As investors increasingly trust that the economy can stand on its own without the need of monetary policy support, business fundamentals should take over as the primary market driver.
Jeremy Grantham explains why he believes that the high equity prices in today’s market have some staying power, and expects it will take much longer than usual for the power of mean reversion to draw profit margins and price earnings ratios back to historical norms.
In a new quarterly letter to GMO's institutional clients, head of asset allocation Ben Inker addresses "perhaps the most common question I get from clients: What keeps you up at night?" ("Up At Night").
Checking in on some “Trump trades.” The election outcome and resulting expectations for fiscal policy have caused several shifts in market leadership toward areas most sensitive to these policies. Policy is not the only factor to consider when evaluating these investments, but it is a very important one.
GMO Quarterly Letter by Ben Inker and Jeremy Grantham