Grantham's latest missive essentially relates that he thinks the market will be buoyed by the financial stimulus (short term gains), that moral hazard has increased enormously (depressing long term returns), and that we are subject to the impost of the Presidential cycle (he did a lousy job of tying it in to his main arguments).
The letter is as prescient as ever. Wide-ranging, full of insights, and he holds no punches. Definitely worth the read (here is a link to where you can link to it).
He is cautioning about the rally, but thinks the stimulus may "clip off the last parts of the bear market." He thinks false hopes and false dawns cushion the potential downside of the bear. He sounds as though he is in the lost decade camp. He talks about those who are on the sidelines with their psychological disposition toward a retracement - watching, regretting and hoping.
Interestingly, he puts S&P 500 fair value at about 880. Also, he is pitching the S&P 500 around 1000-1100 by year end, but he doesn't think the economic fundamentals will support that level.
No comments:
Post a Comment