Author Topic: For the next 10 "market is at an all time high" posters. Jeremy Grantham:  (Read 4814 times)

milesdividendmd

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I really like reading Jeremy Grantham.  He is funny, smart, a good writer and a value guy, which are all admirable qualities in my book.

I enjoyed this recent article about the presence or absence of a bubble in the current stock market:

http://news.morningstar.com/articlenet/SubmissionsArticle.aspx?submissionid=194174.xml

What I took from it was that According to Grantham

1.  We are not in a Bubble.... yet.
2.  His read on the economy is that a bubble starts at a S&P level of 2250
3.  A bubble is coming for a variety of reasons, (deal making, cheap debt, and high profit margins among them)
4.  (There were also some nice bits about his investing errors as a young man and the merits of the Keystone XL Pipeline from a strictly Economic perspective.)

And how reading this article has changed my investment plans...

1.  Not at all. Prediction is a suckers play.  (Just ask Larry Swedroe about the incredibly smart (not being ironic)  Grantham's ability to exploit market inefficiencies

http://www.etf.com/sections/index-investor-corner/22696-swedroe-debunking-granthams-concerns.html

Enjoy




Nords

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What I took from it was that According to Grantham
1.  We are not in a Bubble.... yet.
2.  His read on the economy is that a bubble starts at a S&P level of 2250
3.  A bubble is coming for a variety of reasons, (deal making, cheap debt, and high profit margins among them)
For Grantham, this is practically raging bull sentiment.

milesdividendmd

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True. I always love his writing. We have similar biases I guess.

But what other financial writer will dissect overpopulation, the keystone pipeline, and personal reflections in a Morningstar essay ?



frugalecon

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What I find interesting about Grantham is his focus on the extreme long-run. I get the sense that he thinks about time periods on the order of 20 or 30 years.

arebelspy

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Always interesting to read different perspectives.  Thanks for sharing.

What I find interesting about Grantham is his focus on the extreme long-run. I get the sense that he thinks about time periods on the order of 20 or 30 years.

I wouldn't necessarily call 20-30 years "extreme long run."  That is a good timeframe to look at though.
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Eric

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And maybe the most recent MMM posting will help with this?  Nah, doubt it.

http://www.mrmoneymustache.com/2014/08/20/how-to-invest-in-overvalued-market/


skyrefuge

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And maybe the most recent MMM posting will help with this?  Nah, doubt it.

Probably not, but at least now we can directly point to the scripture we have received from the Mustache on high, and move to cast out any heretics who disobey!

Especially since MMM's example is at the extreme end. If he can fearlessly drop $320k into these "high" markets, surely some 23-year-old should have no trouble dumping in a mere $10k (which seems to be the case we see most commonly). Sure, $10k sounds like a lot to that 23-year-old, but it will really be an inconsequential step in their investing lifetime, regardless of what the markets do.

FIPurpose

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Saw this article today that looked pretty relevant:

http://awealthofcommonsense.com/history-lesson-time-highs/

He takes a percentage of all-time high days by each decade, and shows that there really isn't a correlation between all-time highs and crashes.

Eric

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And maybe the most recent MMM posting will help with this?  Nah, doubt it.

Probably not, but at least now we can directly point to the scripture we have received from the Mustache on high, and move to cast out any heretics who disobey!


:)  Nice!