This week I take great pride and pleasure in being able to bring you a recent letter from my very good friend Peter Bernstein. I asked him to let me publish this, as I think this is one of the more important, thought-provoking pieces I have read in a very long time. I am grateful for that permission, as you will be when you read this. I would take the time to read it through several times. Read this paragraph from the beginning of the letter to get an idea of the thought path down which Peter is going to take us:
"As Goldilocks shreds, we have to start thinking about what kind of long-term environment is going to replace it. Shifts to new environments are always attenuated. They are also rare across time, which means most of us have limited experience with this phenomenon. New environments often tend to sneak up on us and do not announce themselves with a fanfare. Most of us are unaware of what has happened until enough time passes to provide good perspective."
Peter argues persuasively that we are getting ready to enter a new economic and investing environment as profoundly different as the 80s were to the 70s. As I said earlier, take your time and think through the implications of his thoughts.
Peter writes Economic and Portfolio Strategy and has done so for decades. He has won numerous honors, edited some of the most prestigious financial journals and has been at the center of economic thought for six decades. At 87, he is still writing material that makes those of us who are his junior simply stand in amazement and applaud. His book, "Against the Gods - The Amazing Story of Risk" - is on my list as one of the five most important books on economics and finance. You can get it a Amazon.com. And while you are there, get his latest book, "Capital Ideas Evolving" or the important "Power of Gold."
For those interested in his letter or more information about Peter, you can go to www.peterlbernsteininc.com.
John Mauldin, Editor
Outside the Box
The Shape Of The Future
Three months ago, we wrote, "[T]he economic malaise will not be brief, even though its depth is uncertain. The process is going to be like water torture - drip by drip by drip over an extended period of time until all these excesses are squeezed out of the system and new and happier horizons can open up." This metaphor should now form the basis for…