GMO has "given up" on the bond market, says Ben Inker, co-head of asset allocation at the $104B...

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whidbey Comments (3039)
 
Yes, "show me" is the attitude of the survivors at GMO. If one looks to the GMO total allocations, it is international on some debt from EM, but largely large cap stocks and blue chips in core areas, currency hedged. No MPT. They love lumber but not other commodities, including Gold. I think they are looking for less than 7%/ yr for the next 7-10 years. How does this square with the technical? Pretty well since they see bonds as time bombs. The big caps can be core dividends both US and internationally seems fair. Compared to most US managers this allocation is conservative, but probably sound in any market.

In all fairness, I use the allocations in my own advising. So check it out for yourself. But do look at their record over the last decade.
26 Nov 2012, 03:58 PM Reply Like

Interesting Times Comments (3358)
 
Bonds, who in the world would want them now!! Inflation is here, Hyperinflation will occur down the road.

My take is to get involved with metals. Physicals preferably. Consider staying away from SLV, instead go with Sprotts PSLV..Much better play for silver.

Do your own dd on this, but my research shows silver has more upside in the future!!
26 Nov 2012, 11:53 PM Reply Like

phorque Comments (11)
 
"That stocks look cheap is predicated on today's profit margins being sustainable, and 'we don't think they're sustainable anywhere'.

Let's see. I've just stumbled upon $250mm US and I want to invest the great proportion of it somewhere. In the words of the legendary Joe Granville, "What's a new subscriber to do?"

Well, the fact is that if profit margins were cut in half overnight (and this global in scope mind you) current equity returns would still be a long term steal compared to current fixed asset returns. I wonder if this "author" checked into the fixed/variable swaps market lately?

Of course, if Iran sends Hamas a dirty nuke to lob into Jerusalem from Gaza, and Israel turns Iran into glass in retaliation, all bets are off.
27 Nov 2012, 02:20 AM Reply Like