Never, ever be wrong on your own, said Keynes, succinctly explaining the herding (momentum)...

|By:, SA News Editor

Never, ever be wrong on your own, said Keynes, succinctly explaining the herding (momentum) which drives asset prices far from their fair value. As Jeremy Grantham explains, GDP growth is within 1% of the long-term trend 2/3 of the time, yet the S&P is within 19% of fair value 2/3 of the time. "The market moves 19X more than is justified by the underlying engines!" (GMO Quarterly Letter, .pdf)