This is a must read…
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GMO’s Jeremy Grantham’s Q4 Letter
This is a must read…
Disclosure (“none” means no position):
Visit the ValuePlays Bookstore for Great Investing Books
6 replies on “GMO’s Jeremy Grantham’s Q4 Letter”
That was an interesting article. However, I find some of his "forecasts" or statements a bit confusing. For example, on Page 6, after referring to Buffett's NYT op-ed, Grantham says,
"We suspect that cheaper prices are not just possible but probable, although admittedly far from certain."
To me, that sounds like a fancy way of saying he has no idea.
Then later on the same page he says,
"But be prepared for a decline to new lows this year or next, for that would be the most likely historical pattern, as markets love to overcorrect on the downside after major bubbles. 600 or below on the S&P 500 would be a more typical low than the 750 we reached for one day."
The red flag goes up when he's not specifying how he got 600 nor what it's compared against. More astrology-speak to me. "600 or below"? "Admittedly far from certain," on this too, I presume.
Like Buffett says, when you buy a stock you should be able to say I bought XYZ stock because reason #1, #2, #3, etc.
Compare Grantham's top-down, rear-view reporting to any of Buffett's articles from '77, '79, '99, or even his 1951 article on why he likes Geico!! The difference is staggering.
Thoughts?
P.S. I’m not trying to impugn Grantham. I don’t know that much about him other than he seems to be a relatively famous money manager. I’m just pointing certain things that stood out to me for the sake of discussion.
i think he clearly sees lower prices but is being diplomatic in criticizing buffett
I see what you’re saying. My impression of the NYT article was that Buffett’s main aim was to convey his psychological approach during a time of fear. He basically said given that the Dow goes up over the really long-term, he’s more concerned whether Company XYZ is undervalued. Grantham sounds more like a top-down analyst.
Lampert owns over 19 million shares of Citigroup.
Is Lampert a fool.
remember, buffett did not buy common, gs, dow, ge are all convertible that pay him 10$ for 4 years..
that is what he is looing at for the common