J Grantham Asset Class Recos

[wildcat]

I have seen some posts by people wondering where to put money to work for the next run. Latest investment overweight recommendations from the GMO head honcho in Barron's interview.

Overweight:
International Small Value
High Quality US Large
Emerging Markets

Short:
Commodities for now - GMO is short copper and he is personally short oil

Said don't be in a hurry, especially the emerging markets bet, and admitted that he doesn't understand the complexity of our current situation which he took as a sign that we are not out of the woods.

 

[hopingtomakeit]

thanks for your post.

i don't understand all that is happening (understatement), but i do know that grantham (who btw, is cheney's FA, as i understand, fwiw) is one who saw the present situation coming.

some think he's a perma-bear...but, i think a thread concerning grantham's continuing thoughts is very worthwhile.

people i have read who saw this coming: roubini, grantham, hussman, jim rogers, and buffett. maybe others i'm missing.

oh yeah, satyajit das.

there seems to be a bifurcation between the optimistic and the pessimistic, as far as the future.

i wish i knew what will happen. but i think it's good to keep track of the people who saw the present situation coming.

instinctively (though maybe mistakenly) i am very interested in their perceptions of where things might go.

honestly, jeremy grantham was the one that convinced me to raise cash (early in the year, but not perfectly early, which would have been late last year), and so far i'm lucky i did.

this is because of his warning of a perfect storm. from here on, we'll see...

apparently, he's more optimistic now...as is hussman, and perhaps buffett? depending on the deals he gets?

i wish i knew the future...

thanks again,

 

[wildcat]

I think the idea between those guys being more positive now is based on the fact that we are at lower valuations. Lower valuations are the best indicator of future returns thus making the current investment climate better whether it be a bottom or not.

Bob Rodriguez is another that warned about this for years. He is the head at FPA funds. Still hasn't bought much and has his fund 40% cash. They post free articles with commentary and analysis on their site.

Also, GMO's site has forecasted returns for a 8 year (I think) span for many asset classes. Should be interesting to see what the next one looks like following the drop. Free, you just have to register once.