Jeremy Grantham has become a familiar and very popular face on this site. For those treasuring his insight, wisdom and prescient calls, the co-founder and chairman of Boston-based GMO has just published the July edition of his quarterly newsletter, entitled Boring Fair Price.
Grantham’s 2Q 2009 letter includes the topics “Boring Fair Price” (or, “Waiting for Markets to be Silly Again”) and “Running Out of Resources”, which looks at slower economic growth in light of the recent financial crisis and dwindling resources.
Grantham starts the newsletter with the following paragraph:
“A year is certainly a long time in markets, and so is a quarter. A year ago, equities globally – and everything else for that matter – were very overpriced, particularly if they were risky. A quarter ago, in mid-March, prices everywhere were cheap. Now they have all – or almost all – converged for a few unusual moments at fair value. A year ago, it was very easy to know what to be: a risk avoider. It was not so easy reinvesting when terrified, but most of us knew that we should have been doing more. But today? It’s difficult to be inspired at fair value.”
And here are his concluding sentences:
“…if you feel yourself becoming overconfident about anything, take a cold shower and start again. Just be patient. In our strange markets, you usually don’t have to wait too long for something really bizarre to show up.”
Click here for the full report.
Source: Jeremy Grantham, GMO, July 27, 2008.
