Below is the GMO 7 year forecasts of a variety of asset classes. As can be seen GMO is quite bearish on nearly everything besides "high quality" US stocks, emerging markets, and Timber.
Jeremy Grantham describes what GMO means by high quality US stocks as "It's high return, stable return, and low debt. " and _"Quality is quality; we kind of know what it is. It's a great franchise company." However, no exact metrics have been stated.
I assume they (GMO/Grantham) are referring to blue chip stocks, with strong balance sheets and high dividends, stocks such as Coke, Proctor & Gamble, Johnson & Johnson, and other Dow components that have pricing power. However, I have never seen the exact criteria for what qualifies as high quality.
Overall, this chart largely agrees with my views presented in my latest monthly valuation article., where I am quite bearish about overall market returns in the coming decade. Seth Klarman also believes that this will be another lost decade for stocks. If anyone has an opinion on the long term market feel free to comment below.
GMO 7 Year Forecast February 2011
Disclosure: Long Ko
http://www.valuewalk.com/
Jeremy Grantham describes what GMO means by high quality US stocks as "It's high return, stable return, and low debt. " and _"Quality is quality; we kind of know what it is. It's a great franchise company." However, no exact metrics have been stated.
I assume they (GMO/Grantham) are referring to blue chip stocks, with strong balance sheets and high dividends, stocks such as Coke, Proctor & Gamble, Johnson & Johnson, and other Dow components that have pricing power. However, I have never seen the exact criteria for what qualifies as high quality.
Overall, this chart largely agrees with my views presented in my latest monthly valuation article., where I am quite bearish about overall market returns in the coming decade. Seth Klarman also believes that this will be another lost decade for stocks. If anyone has an opinion on the long term market feel free to comment below.
GMO 7 Year Forecast February 2011
Disclosure: Long Ko
http://www.valuewalk.com/
