Grantham's Prediction

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scomac
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Re: Grantham's Prediction

Post by scomac » 14 Mar 2013 08:25

ig17 wrote:Whenever I read Grantham or listen to him, I want to sell everything and go hide under the bed. Is this normal?
Funny -- I didn't feel that way at all...

I do believe that he is correct though with respect to 1% growth rate as being the "new normal" (to borrow a phrase from another pundit).

The world she's a changin' and the models that have been used for the past 50-100 years when it comes to economics and finance are going to have to change along with it. The funny part is that we already have a field test for what's happening and yet policy makers don't seem to be paying attention...or maybe they are. :?
"On what principle is it, that when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?"
Thomas Babington Macaulay in 1830

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Re: Grantham's Prediction

Post by George$ » 14 Mar 2013 10:36

ig17 wrote:Whenever I read Grantham or listen to him, I want to sell everything and go hide under the bed. Is this normal?
I find Grantham thoughful and honest. Thus I seek out his views.
After listening to him I continue to - "hope for the best but at the same time try and be prepared for the worst".
:lol:
“The search for truth is more precious than its possession.” Albert Einstein

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Re: Grantham's Prediction

Post by ig17 » 14 Mar 2013 20:51

George$ wrote:I find Grantham thoughful and honest. Thus I seek out his views.
So do I. He is very credible. That's why I find his messages so scary. He is not your average doomer and gloomer. :D

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Re: Grantham's Prediction

Post by westinvest » 14 Mar 2013 21:24

It seems Grantham and the New York Times have both joined the anti-Keystone movement, based on the belief that the Oil Sands carbon should be left in the ground. They are obviously not alone in this belief, but it is interesting that pro-business voices are joining the environmentalists, to the degree that both use the "tar sands" moniker. PR machine at work?

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Re: Grantham's Prediction

Post by FinEcon » 18 Mar 2013 14:43

ig17 wrote:Whenever I read Grantham or listen to him, I want to sell everything and go hide under the bed. Is this normal?
Probably, if you believe everything you hear. Personally, I find listening to him speaking makes me very drowsy. His newsletter often has fantastic stories and factiods, particularly the historical anecdotes. Sadly these are buried in haystacks of useless minutia on various macroeconomic issues.
What the human being is best at doing is interpreting all new information so that their prior conclusions remain intact

-- Warren Buffett

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Re: Grantham's Prediction

Post by FinEcon » 18 Mar 2013 14:48

westinvest wrote:It seems Grantham and the New York Times have both joined the anti-Keystone movement, based on the belief that the Oil Sands carbon should be left in the ground. They are obviously not alone in this belief, but it is interesting that pro-business voices are joining the environmentalists, to the degree that both use the "tar sands" moniker. PR machine at work?
Well, IMO, one has to wonder how much Kinder Morgan, ETP, etc he owns? One also has to wonder what his beleif would be if he owned, in it's entirety, the 'tar sands'. Would the asset be destined to remain undeveloped?
What the human being is best at doing is interpreting all new information so that their prior conclusions remain intact

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Re: Grantham's Prediction

Post by gyrfalcon » 18 Mar 2013 15:32

FinEcon wrote:Well, IMO, one has to wonder how much Kinder Morgan, ETP, etc he owns? One also has to wonder what his beleif would be if he owned, in it's entirety, the 'tar sands'. Would the asset be destined to remain undeveloped?
It's kind of sad when it is assumed that no one can have genuine ethics. Anyone who reads Grantham (and believes that ethics do occur) will recognize that he is sincerely, hugely concerned about the future, more for future generations than for himself.

The answer to the shallow, rhetorical question re his owning the "tar sands" is simple and *critical*: He wouldn't own them.

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Re: Grantham's Prediction

Post by ig17 » 18 Mar 2013 15:52

gyrfalcon wrote:The answer to the shallow, rhetorical question re his owning the "tar sands" is simple and *critical*: He wouldn't own them.
The article below claims that GMO has significant positions in Exxon and CNQ. Both companies develop tar sands.

http://seekingalpha.com/article/1027951 ... s-collapse

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Re: Grantham's Prediction

Post by gyrfalcon » 18 Mar 2013 16:23

ig17 wrote:
gyrfalcon wrote:The answer to the shallow, rhetorical question re his owning the "tar sands" is simple and *critical*: He wouldn't own them.
The article below claims that GMO has significant positions in Exxon and CNQ. Both companies develop tar sands.

http://seekingalpha.com/article/1027951 ... s-collapse
Thank you. My second point was poorly worded and/or poorly thought through. Of course, GMO as a Co. has very real obligations to all clients and cannot be totally offside from major sectors. My comment would apply to what I believe Grantham would do himself, for himself, as a direct investment. But no doubt he has large parts of GMO's general portfolios too, and therefore your point is *valid*.

The fact that GMO does own Exxon & CNQ much better shows how insulting and unfair FinEcon's comment was. They own these & Grantham STILL says exactly what he thinks. Therefore, FinEcon's insinuation is false.

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Re: Grantham's Prediction

Post by FinEcon » 18 Mar 2013 17:06

gyrfalcon wrote: The fact that GMO does own Exxon & CNQ much better shows how insulting and unfair FinEcon's comment was. They own these & Grantham STILL says exactly what he thinks. Therefore, FinEcon's insinuation is false.
Oh stop crying already. What I posited was food for thought, no more no less. I beleive that people's beliefs tend to be inherently intertwined with their own interests. I seriously doubt that any person, Grantham included, would believe the tar sands ought to stay in the ground if that same person owned the whole thing.

Consider it another way, I hate smoking and would very much like it if cigarettes were banned (of course this doesn't work outside of thought experiment land) but I will still invest in the companies in the mean time because my econommic (large) intrest trumps my personal (small) intrest in this case. I will also denounce a substitute product/service/etc of a rival firm when it is in my interest to do so.
What the human being is best at doing is interpreting all new information so that their prior conclusions remain intact

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Re: Grantham's Prediction

Post by ghariton » 18 Mar 2013 17:09

"It is very difficult to get a man to understand something when it is in his personal interest not to."

-- Anon.
The plural of anecdote is NOT data.

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Re: Grantham's Prediction

Post by tidal » 18 Mar 2013 17:33

FinEcon wrote:... I beleive that people's beliefs tend to be inherently intertwined with their own interests. I seriously doubt that any person, Grantham included, would believe the tar sands ought to stay in the ground if that same person owned the whole thing...
This really doesn't follow.

Even in the bizarre thought experiment you are imagining, say, where your long-lost and recently-departed Uncle Tex left you the deed to the entire oil sands - let alone a few shares of publicly-traded corporations operating there - it doesn't mean you are forced to own them ad infinitum. You could just sell the investment.

And yes, this is not the same as simply guaranteeing that they are shuttered and left in the ground by continuing to own 100% of them and refusing to develop any... But since you seem so dedicated to always maximizing your own economic advantage: selling an asset that you think should be shuttered and eventually worth zero - especially if you are going to actively work to make that come about - isn't even working against your financial self-interests. And you could actually use some of the wealth realized to fund projects and research to protect the environment. Like Grantham himself has done.

Yes, I do get the idea that gambling and porn and tobacco and other vice stocks can carry a valuation penalty, as various individuals and institutions refuse to own them, and this may present opportunities for other investors with no such compunctions. Fair enough. But that wasn't your point about Grantham, which really doesn't follow.
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Re: Grantham's Prediction

Post by FinEcon » 18 Mar 2013 19:38

gyrfalcon wrote: The fact that GMO does own Exxon & CNQ much better shows how insulting and unfair FinEcon's comment was. They own these & Grantham STILL says exactly what he thinks. Therefore, FinEcon's insinuation is false.
Jeremy Granthams environmental legacy vs Jeremy Granthams marginal investment returns on firms concentrated in tar sands development. Which is bigger? Sounds like a solid gameplan to me:
1) happily take the money from petrocarbon related investmnets
2) publicly denounce specific projects/locations
3) fund cause/group/org which takes the opposite position

Whew, right from page 2 of Blonde's playbook. I should study this in greater detail, there is probably money in it :lol:
What the human being is best at doing is interpreting all new information so that their prior conclusions remain intact

-- Warren Buffett

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Re: Grantham's Prediction

Post by George$ » 02 May 2014 08:12

GMO First Quarter 2014 letter
Conclusion and Summary

The bull market may come to an end any time, indeed as I write it may already have happened. It could be
derailed by disappointing global growth, profits sagging as deficits are cut, a Russian miscalculation, or, perhaps
most dangerous and likely, an extreme Chinese slowdown. But I believe it probably (i.e., over 50%) will not end
for at least a year or two and probably not before it reaches a level in excess of 2,250 on the S&P 500. Prudent
long-term value investors will of course treat all of the above as attempted entertainment (although I believe all
statistically accurate) and be prepared once again to prove their discipline and man-hoods (people-hoods) by
taking it on the chin.

I am not saying that this time is different (attention Edward Chancellor). I am sure it will end badly. But given
this regime of the Federal Reserve and given the levels of excess at other market peaks, I think it would be
different to end this bull market just yet.
“The search for truth is more precious than its possession.” Albert Einstein

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Re: Grantham's Prediction

Post by DenisD » 11 Nov 2016 00:29

GMO Quarterly Letter
More about Purgatory and Hell and the next 20 years.

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We believe the case for investing in resource equities is compelling. Historically, investors in resource equities have enjoyed strong returns, along with diversification and inflation protection benefits. Investors in resource equities also gain exposure to global growth and potential commodity price appreciation. From a more tactical perspective, valuations have been hovering around historic lows relative to the broad market, and when resource equities have been cheap relative to the broad market historically, they’ve performed quite well going forward. Yet, investors are still wary of investing in commodity producers due to the commodity price risk and the always uncertain commodity outlook. Long-term investors willing to tolerate that shorter-term risk should strongly consider whether they have allocated enough to this exciting and unloved segment of the market.

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