Jeremy Grantham: “S&P worth no more than 950”
Jeremy Grantham has become a familiar and very popular face on this site. For those treasuring his insight, wisdom and prescient calls, the co-founder and chairman of Boston-based GMO has just published the August edition of his popular newsletter. In the context of today’s turbulent markets, Grantham’s Letter revisits his early 2009 piece “The Last Hurrah and Seven Lean Years” wherein he asserted that it would be a rocky return to normal for the markets after the excesses of the previous decade. Presenting both positive and negative factors, he evaluates where we are two years into the period.
Here is an addendum that Grantham has added to the start of his thoughtful newsletter:
“My worst fears about the potential loss of confi ence in our leaders, institutions, “and capitalism itself” are being realized. We have been digging this hole for a long time. We really must be serious in our attempts to resuscitate the “average hour worked” and the fortunes of the average worker. Walking across the Boston Common this morning, I came to realize that the unpalatable (to me) option of some debt forgiveness on mortgages looks increasingly to be necessary as well as the tax changes I discuss here.
“To go further, if we mean to prosper long term, I am sure we need to act to make debt less attractive to everybody: it really is a snare and a delusion.”
Grantham concludes with a section on what to buy, as summarized below.
Click here for the full report (free registration is required).
Source: Jeremy Grantham, GMO, August 9, 2011.
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