Jeremy Grantham Shares Top 10 Issues On His Mind Today

The last time I blogged about Jeremy Grantham, the British-born investment strategist and founder/former chairman of Grantham, Mayo, Van Otterloo & Co. (oversees $118 billion in client assets as of March 31), he warned (once again) in an investment letter released around the start of May:

It seems logical to assume that absent a major international economic accident, the current Fed is bound and determined to continue stimulating asset prices until we once again have a fully-fledged bubble. And we are not there yet…

To remind you, we at GMO still believe that bubble territory for the S&P 500 is about 2250…

(Editor’s note: The S&P 500 ended the day at 2,109)

Grantham, whose individual clients have included current Secretary of State John Kerry and former Vice President Dick Cheney, should be coming out with a new advisory on the GMO website in a couple of weeks. Meanwhile, for readers who can’t get enough of Mr. Grantham’s insights, this afternoon I came across a piece on the Morningstar website entitled “10 obsessions of an investment guru.” Jason Stipp wrote right before the weekend:

Jeremy Grantham is the chief investment strategist at Grantham Mayo van Otterloo (GMO). Before launching into his formal keynote presentation at the 2015 Morningstar Investment Conference at Chicago, Grantham took a moment to tick off the top 10 issues on his mind today.”In my current role, I’m totally free to obsess about important issues that interest me,” he said. And here they are, fleshed out a bit with some quotes from Grantham’s commentaries…

Those who pay regular attention to Grantham will recognize some of those issues, including resource “limitations” and a Federal Reserve that’s forever blowing asset bubbles. However, in the Morningstar piece he also talks about income inequality, corporate (ir)responsibility, and, did I mention investment bubbles? From the article:

10) Investment bubbles. Grantham said we’re not there yet, but we’re well on our way as valuation levels approach the 2-sigma event that creates the sufficient but not necessary environment for bubbles. But every bubble needs a trigger — such as deal mania or mass speculation by individual investors. Those factors are not yet present, Grantham said. “I’m going to be incredibly prudent starting closer to the election,” Grantham added. “I recommend the same to you.”

This is a good read, which you can view in its entirety on the Morningstar website here.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s notes: Info added to “Crash Prophets” page; I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)

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