At the recent Value Investing Congress Whitney Tilson referred to Jeremy Grantham's list of 10 negatives that are likely to hamper the economies of the developed countries. Tilson thinks we are headed for a stock market that goes nowhere for the next several years.
Tilson's T2 Hedge fund is up 203% vs 14% for the S&P 500 since inception so he is worth giving a listen to.
Here is Grantham's list of 10:
1.Over-indebtedness of consumers in certain countries, including the U.S., the U.K., and several European countries
2.Dangerously excessive financial system debt was moved across, with additions, to become dangerously excessive government debt
3.We have lost a series of artificial stimuli that came out of the steady increases in debt levels and the related asset bubbles
4.Very bad things may lie ahead in Europe, and banks in general are undercapitalized and reluctant to lend
5.Runaway costs in the public sector, particularly at the state and city levels, have run into a brick wall of reduced taxes
6.Unemployment is high and will also suffer from the loss of those kickers related to asset bubbles
7.Trade imbalances and the explosion of domestic sovereign debt levels
8.Incompetent management in Spain, Greece, Portugal, Ireland, and Italy allowed the local competitiveness of their manufactured goods to become 20% or more uncompetitive with those of Germany
9.The general rising levels of sovereign debt and the particular problems facing the euro bloc and Japan are leading to the systematic loss of confidence in our faith-based currencies
10.Widespread over-commitments to pensions and health benefits
