Jeremy Grantham

Jeremy Grantham

Last Update: 2014-08-13

Number of Stocks: 488
Number of New Stocks: 46

Total Value: $36,825 Mil
Q/Q Turnover: 10%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Jeremy Grantham Watch

  • GMO White Paper – 'The Road Less Traveled: Minimizing Shortfall and Dynamically Allocating in DC Plans'

    By James Sia


    As Defined Contribution (DC) plans have taken center stage in many retirement systems throughout the world,2 so too have pre-packaged multi-asset solutions. Target Date Funds (TDFs), Life Cycle Funds, Managed Accounts, Advice, Target Risk, Life Style and Diversified Growth Funds all provide some type of “one-stop shopping” for DC investors. In the U.S., TDFs have become the dominant solution, capturing overwhelming amounts of cash flows from plans that adopt them as their “Qualified Default.”3 In an attempt to maximize return relative to risk, these products are typically anchored in Modern Portfolio Theory. At GMO, we believe DC retirement saving is a wealth challenge, not a return challenge. This may seem a subtle difference, but there are significant implications. We believe minimizing the likelihood of falling short of one’s wealth target (expected shortfall) is more relevant to the participant’s actual needs than maximizing return per unit of risk. Minimizing expected shortfall continually creates portfolios that focus on how much wealth is needed and when it is needed, based on the assets invested and time horizon to retirement. We believe this is a better objective for today’s DC plans.

      


  • For Investors Thinking that the Internet Would Continue Growing

    In this article, let's take a look at Akamai Technologies Inc. (AKAM), a $10.96 billion market cap company, which is a company that develops and deploys solutions designed to accelerate, improve and secure the delivery of Internet content and applications.


    Computing platform

      


  • Jeremy Grantham's GMO Q2 Letter - 'Summer Essays'

    1 Bubbles Again: Setting Up for a Deal Frenzy Despite a shocking 2.9% setback in first quarter GDP (quarterly decline at annualized rate), the extent of which was forecast by no one, and despite a substantial decline in NIPA corporate earnings, the market has climbed slowly but steadily in recent months. Market volatility has declined to very low levels despite these setbacks and despite Middle Eastern problems. (The negative January Rule this year has, for that matter, also been ineffective so far.) So, all is apparently well, as we have arrived within three months of the dreaded (by bears) Presidential third year. Accordingly, my recent forecast of a fully-fledged bubble, our definition of which requires at least 2250 on the S&P, remains in effect.


    What is worse for us value-driven bears, a further bullish argument has struck me recently concerning the probabilities of a large increase in financial deals. Don’t tell me there are already a lot of deals. I am talking about a veritable explosion, to levels never seen before. These are my reasons. First, when compared to other deal frenzies, the real cost of debt this cycle is lower. Second, profit margins are, despite the first quarter, still at very high levels and are widely expected to stay there. Not a bad combination for a deal maker, but it is the third reason that influences my thinking most: the economy, despite its being in year six of an economic recovery, still looks in many ways like quite a young economy. There are massive reserves of labor in the official unemployment plus room for perhaps a 2% increase in labor participation rates as discouraged workers potentially get drawn into the workforce by steady growth in the economy. There is also lots of room for a pick-up in capital spending that has been uniquely low in this recovery, and I use the word "uniquely" in its old-fashioned sense, for such a slow recovery in capital spending has never, ever occurred before. The very disappointment in the rate of recovery thus becomes a virtue for deal making. Previous upswings in deals tended to occur at market peaks, like 2000 and 2007, which in complete contrast to today were old economic cycles already showing their wrinkles. Worse than being in full swing, they were usually way over capacity. Thus, 2000 was helped along by the bubble in growth stocks to over 60 times earnings, allowing companies like Cisco, possibly correctly, to believe they were dealing with a near-zero cost of capital in making deal after deal for their massively overpriced stock.

      


  • GMO May 2014 Seven Year Asset Forecast

    <p style=" margin: 12px auto 6px auto; font-family: Helvetica,Arial,Sans-serif; font-style: normal; font-variant: normal; font-weight: normal; font-size: 14px; line-height: normal; font-size-adjust: none; font-stretch: normal; -x-system-font: none; display: block;"> GMO 7 Yr Asset Class Forecast May 14

      


  • Top 5 New Buys of GMO's Jeremy Grantham

    Jeremy Grantham (Trades, Portfolio) is one of the founders of GMO, a firm that invests according to a conservative, value-oriented philosophy. As of Sept. 30, 2013, GMO oversees $112 billion in client assets. Its U.S. Equity fund returned 10.80% since inception in 1989, against its blended benchmark’s 10.24%.

    In the first quarter, GMO purchased 76 new stocks, for a total of 558 holdings, and 12% portfolio. The portfolio is valued at $38.3 billion.  


  • April 2014 GMO 7-Year Asset Class Forecast - What to Buy, What to Avoid



  • Jeremy Grantham First Quarter 2014 Letter



  • GMO International Q1 2014 Report



  • Market Will Rise and Then Crash - Jeremy Grantham

    A few weeks ago, Jeremy Grantham (Trades, Portfolio), the co-founder of money management firm GMO, called newly appointed Federal Reserve chairman Janet Yellen "ignorant" in the New York Times. He also said the reason for the slow recovery was not the severe financial crisis, continued high unemployment, or the many standoffs in Washington. Instead, he blamed the Fed for ruining the recovery it was supposed to stimulate. To someone who believes in the laws of economics, it's hard to overstate how odd that claim is. It's positively bonkers.

    Low interest rates stimulate the economy. The Fed has done everything in its power to keep interest rates down, lower and longer than anyone can remember. That should have helped the economy. And yet the recovery has been just meh. So, either Grantham is bonkers, or he is onto something. Fortune recently caught up with him to find out.  


  • A Bad Seed in the Profitable Advertising Industry

    Clear Channel Outdoor Holdings Inc. (CCO) has been a popular investment in the advertising industry so far, as it shares more than 70% of domestic billboard revenue with competitors Lamar Advertising Co. (LAMR) and CBS Corporation (CBS). However, CC Media’s recent holding position of 89% of the advertising firm has made many shareholders uneasy, in addition to bumping the uncertainty rating from medium to high. Therefore, investment gurus Paul Tudor Jones (Trades, Portfolio) and Jeremy Grantham (Trades, Portfolio) reduced their participation in the company, which leaves me wondering what will happen looking forward.


    Expect Growth, but Minor Profits for Shareholders

      


  • Dover: An All-Around Winner

    Looking at profitability is a very important step in understanding a company, since it is —essentially — the reason behind a company’s existence, and a key component in deciding whether to invest in a company or sell out your stocks. In this article I will look at Dover Corporation (DOV)’s earnings, profit margins, profitability ratios and cash flow. In addition, I will evaluate which institutional investors bought the stock in the recent quarters.



    As an industrial conglomerate, this company owns over 40 separate businesses, spread out through four major niche end markets: engineered systems (42%), energy (27%), communications technology (19%), and printing and identification (12%). With a strong focus on product innovation and customer relationships, Dover operates under a decentralized organizational structure, by acquiring smaller businesses in those industries and end markets it is most familiar with. And so far, this strategy has been successful, leading to strong profitability and efficient working capital management.

      


  • GMO White Paper: A CAPE Crusader ─ A Defence Against the Dark Arts by James Montier

    Having spent a large proportion of my career prior to joining GMO working at investment banks, I'm well aware of what Andrew Smithers describes as "Stock Broker Economics," the second tenet of which is "The market is always cheap."1 Over the years I've witnessed many attempts by the practitioners of this most dark art to justify why tried and tested measures of valuation are no longer meaningful, or occasionally create new measures of valuation that purport to show the market to be cheap.2


    A recent outbreak of precisely this brand of sorcery has surrounded the Shiller P/E (price relative to 10-year moving average earnings adjusted for inflation as shown in Exhibit 1). Wizards range from the seemingly ever optimistic Jeremy Siegel to any number of Wall Street strategists, and even a blogger whose work I generally enjoy.3 Given that one should always look for evidence that may prove one wrong, I've spent some time thinking about the issues they have raised and have summarized my thoughts in this short paper.

      


  • A Look at Mattel’s Profitability

    Children’s play patterns have been shifting towards digital products, and away from the traditional toy segment, over the past few years. However, toy manufacturer Mattel Inc. (MAT) is taking measures to develop its products, as well as augment its marketing plans and consumer engagement tactics, in order to counterbalance this trend. Furthermore, as the largest company in the toy industry, it enjoys supreme brand strength via the Barbie, Hot Wheels, Fisher-Price, and American Girl products, which continue to drive growth. While the company still faces industry competition from Hasbro Inc. (HAS), apart from the aforementioned headwinds, its increasing dividend yield of 4.10% and frequent share buybacks should be tempting for investors.



    Profitability is one of the main factors one must look at when analyzing a company. It is not only the reason behind a company’s existence, but also a key element when determining whether to invest in a company or not. Thus, in this article I will look into Mattel’s earnings growth, profit margins, profitability ratios and cash flow. Additionally, I will evaluate which institutional investors bought the stock in the recent quarters (institutional backup can tell a lot about a stock).

      


  • GMO 7-Year Asset Class Forecast - Getting Bullish on Emerging Markets (January 2014)



  • Texas Instruments Still Has Upside According to Its Intrinsic Value

    Texas Instruments Inc. (TXN) designs and manufactures semiconductors and is one of the largest suppliers of analog and Digital Signal Processing (DPS) integrated circuits.The company's plan is to increase differentiation in its business and gain exposure to many end markets and customers. Its focus is the analog chip business, which consequently reduces the wireless segment, which is a lower-margin one.The company's largest competitors include Qualcomm Inc. (QCOM) and STMicroelectronics NV (STM).


    Turning our attention to the future direction of the stock, let's take a look at the intrinsic value of this company and try to explain to investors the reasons why it is a good buy or not.

      


  • Tocqueville Asset Management - Value Investing in a Liquidity Driven Environment

    "Those are my principles, and if you don't like them…well, I have others." – Groucho Marx


    Of course, principles are supposed to be unbendable. But the recent global financial crisis and recessions have forced even the most thoughtful investors to revisit some of their long-held beliefs and evaluate whether some of these were true principles or just old habits. For example, one of my most successful and well-known value-investor friends commented a couple of years after the crisis, “Maybe we should have paid more attention to the macro picture.” I suspect that many value investors, who profess to be above all bottom-up stock pickers, have felt that way.

      


  • GMO Fourth Quarter Update - Top Holdings



  • Jeremy Grantham Fourth Quarter 2013 Letter



  • 2014 Oil Outlook (PIMCO) - How Slick Is the Oil Slope



    • While the supply outlook tilts the balances toward bearish in 2014, an improving global economy is a positive for oil demand and a support for prices.
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  • GMO International Update - Q4 2013



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