Jeremy Grantham: U.S. Stocks Now 'Very Reasonable Buys for Brave Value Managers'

Jeremy Grantham of GMO has released Part I of his Q3 letter (.pdf, dated October 17, 2008). Here's how Grantham sees the market at this juncture:

At under 1000 on the S&P 500, U.S. stocks are very reasonable buys for brave value managers willing to be early. The same applies to EAFE and emerging equities at October 10th prices, but even more so.

History warns, though, that new lows are more likely than not. Fixed income has wide areas of very attractive, aberrant pricing. The dollar and the yen look okay for now, but the pound does not.

Don’t worry at all about inflation. We can all save up our worries there for a couple of years from now and then really worry! Commodities may have big rallies, but the fundamentals of the next 18 months should wear them down to new two-year lows.

As for us in asset allocation, we have made our choice: hesitant and careful buying at these prices and lower.
 

Comments

[Pipo:]

Seems to agree to Buffett.

warrenbuffettstocks.bl.../

2008 Oct 21 08:30 PM

[User 283434:]

Nothing new here. He simply repeated other smart investors have already said better.

2008 Oct 21 08:40 PM

[herbert hoover:]

Let him go for it. Treasuries for me.

2008 Oct 21 09:21 PM

[mkreisel:]

"Let him go for it. Treasuries for me. "

That's the prevalent attitude of retail guys at moment.

2008 Oct 21 11:56 PM

[bbowen7:]

More about this "worry about inflation in a couple of years" attitude? There is no way that the US can get out of its debt hole without running the printing press. What I truly don't understand is who is buying 30 year bonds at mid-single digit returns.

2008 Oct 22 12:15 PM

[mkreisel:]

China, Saudis, small retail investors, and panicked bankers are buying them.

You want to follow this crowd?

2008 Oct 23 03:17 AM