My long-time readers are familiar with Jeremy Grantham of GMO, as I quote him a lot. He is one of the more brilliant and talented value managers (and I should mention, very successful on behalf of his clients). He writes a quarterly letter that I regard as a must-read. In fact, anything Jeremy writes is a must-read. This week’s OTB is a little longer than most, but it is actually two separate parts, which can be read at different times – but you want to take the time. He makes his predictions for the year in the first part, and gives us some valuable insights into the stock market in the second. The first part reads quick. Think through the second part.For those interested, I did an interview with Tanya Benedicto, a new and upcoming blogger from Forbes, from The Breakers in Palm Beach. She reminds me of my twins. Other than calling me MR. Mauldin, it was a good interview and a short five minutes on what has me disconcerted this week. Here is the link: http://blogs.forbes.com/tanyabenedicto/2011/01/30/thoughts-from-the-frontline/.
Enjoy your week. I am off to Vegas and then Thailand, assuming the predicted ice storm allows me to get out of Dallas. And figure out a time to write an e-letter. And for fun, I offer a picture of something David Walker handed me as we were getting ready to do our panel last Thursday.
Your really excited about Thailand analyst,
My long time readers are familiar with Jeremy Grantham of GMO as I quote him a lot. He is one of the more brilliant and talented value managers (and I should mention very successful on behalf of his clients). He writes a quarterly letter which I regard as a must read. I have excerpted parts of his recent letter, where the chief investment strategist really takes the current financial system follies to task. Typical of his great writing and thinking is the quote from this week's Outside the Box selection:
"I can imagine the company representatives on the Titanic II design committee repeatedly pointing out that the Titanic I tragedy was a black swan event: utterly unpredictable and completely, emphatically, not caused by any failures of the ship's construction, of the company's policy, or of the captain's competence. "No one could have seen this coming," would have been their constant refrain. Their response would have been to spend their time pushing for more and improved lifeboats. In itself this is a good idea, and that is the trap: by working to mitigate the pain of the next catastrophe, we allow ourselves to downplay the real causes of the disaster and thereby invite another one. And so it is today with our efforts to redesign the financial system in order to reduce the number and severity of future crises."
You can get the full letter at www.gmo.com (You will have to register).
Your glad to be back home at least for a week,
This week's Outside the Box is comprised of 2 smaller articles that I believe will, collectively, provide you with some interesting information to digest. The 1st article will be a follow up piece to last week's Outside the Box where I featured a commentary by Morgan Stanley's Chief Economist Stephen Roach titled "The Missing Link to Global Rebalancing." Kathleen Camilli, the President of Camilli Economics, has weighed in on some of Roach's views by providing a quasi-rebuttal of her own. While her article "Household Wealth and the US Savings Rate" does not address the structural current account deficit that Roach points out, it does address the low savings rate/Asset Economy issue. You can reach here at www.camillieconomics.com.
And secondly, I quoted some excerpts from Jeremy Grantham's latest letter to investors in my weekly publishing of "Thoughts from the Frontline." Many people have since expressed curiosity about this letter so we've decided to reproduce the whole letter for you to read.
Each article provides some thought-provoking commentary and insight that I believe you will thoroughly enjoy.