{"id":243130,"date":"2010-01-28T14:40:00","date_gmt":"2010-01-28T19:40:00","guid":{"rendered":"e2249889-c78b-43e3-9643-b1d7d4aa587b:388069"},"modified":"2010-01-28T14:40:00","modified_gmt":"2010-01-28T19:40:00","slug":"grantham-see-dark-days-ahead","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/243130","title":{"rendered":"Grantham see dark days ahead"},"content":{"rendered":"

Jeremy Grantham of GMO<\/a>, the Boston money manager, has been one of the most accurate market prognosticators of the past decade. Unlike many managers, he\u2019s succeeded with both bearish calls and bullish ones.<\/p>\n

For instance, Grantham warned of the dotcom bubble in 1999; a few years later, he cautioned that home prices had gone insane. A decade ago, he argued that emerging market stocks and debt would be top investments. More recently, he predicted that the S&P 500 would shoot higher in late 2009.<\/p>\n

So what does the oracle of Boston see now? A bit of good news, but mostly a darkening outlook.<\/p>\n

In his most recent quarterly letter, Grantham suggests there is a strong chance that the S&P 500 will go to 1200, if not higher, during the next six months. The problem is that the market is only worth about 850 or so, he figures. \u201cThe real trap here, and a very old one at that, is to be seduced into buying equities because cash is so painful,\u201d he writes.<\/p>\n

Grantham believes the best values are to be found in high-quality U.S. stocks, such as Microsoft Corp., Johnson & Johnson and Wal-Mart Stores Inc.. He predicts these cash-producing, low-debt firms will produce real returns of 6.8% a year over the next seven years. In contrast, he believes the broader group of large-cap U.S. stocks will eke out only 1.3% real annual returns.<\/p>\n

One notable change to Grantham\u2019s outlook is that he no longer sees an overwhelming case for emerging-market stocks. He thinks they will produce 3.9% annual real returns over the next seven years, but will lag slightly behind international stocks in the MSCI EAFE index of Europe, Australasia and the Far East. As he sums up: \u201cEAFE equities seem a little overpriced, emerging markets more so, and fixed income seems badly overpriced.\u201d<\/p>\n

Freelance business journalist Ian McGugan blogs for the Financial Post. <\/i> <\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Jeremy Grantham of GMO, the Boston money manager, has been one of the most accurate market prognosticators of the past decade. Unlike many managers, he\u2019s succeeded with both bearish calls and bullish ones. For instance, Grantham warned of the dotcom bubble in 1999; a few years later, he cautioned that home prices had gone insane. […]<\/p>\n","protected":false},"author":4060,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-243130","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/243130","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4060"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=243130"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/243130\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=243130"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=243130"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=243130"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}