Jeremy Grantham’s Latest Quarterly Commentary

By on January 27, 2010

GMO has released their quarterly letter and it contains the pointed observations of my favorite commentator, Jeremy Grantham. He has an uncanny knack for getting to the root of our problems and doesn’t pull any punches.

Grantham can’t hide his disdain for the Fed in his “Lessons Learned in the Decade:”

The Fed is capable of being extremely out of touch
with the real world – “what housing bubble?” – plus
more doctrinaire – “no, the low rates had no effect on
housing” – than anyone could have imagined.

and

The Fed learns no lessons!

Grantham also makes an interesting observation regarding mispricing in the markets:

Asset classes really are more inefficiently priced than individual stocks on average, and therefore offer greater opportunities for adding value and reducing risk.

Grantham expands on themes he has examined in the past; that high quality large caps are much cheaper than the rest of the market and low rates over a long period of time lead to asset bubbles and subsequent problems. His commentary is laced with humor and sarcasm and is definitely enlightening.

Source: The Pragmatic Capitalist
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