Irrational Exuberance in the U.S. Equity Market
Jeremy Grantham | April 2000
In the GMO 1Q 2000 Letter, Jeremy Grantham recounts the events of the prior quarter. In the first quarter, the U.S. equity market continued down the path it had been going. Technology stocks completely dominated all other sectors of the market, with euphoria spreading to smaller, more speculative issues and reaching levels probably never seen before.
It's Everywhere, In Everything: The First Truly Global Bubble
Jeremy Grantham | April 2007
Jeremy Grantham's 1Q 2007 letter to clients discusses the necessary conditions for a market bubble, and why it's difficult to pinpoint when the bubble will burst or the particular catalyst for the burst. Letters to the Investment Committee XI extends last quarter's discussion ("Let's All Look Like Yale") in "Yale Meets Goldilocks," with a focus on the effects of the trend to diversify away from traditional investments and into non-traditional asset categories.
When Diversification Failed
Ben Inker | December 2008
In this paper written as the GFC was roiling markets, Ben Inker outlines why we at GMO believe investors need to reassess the virtues of diversification among risk assets.
Reinvesting When Terrified
Jeremy Grantham | March 2009
In the depths of the Global Financial Crisis, Jeremy Grantham advises investors how to avoid terminal paralysis and reinvest, by creating and then sticking to battle plans.
I Want to Break Free
James Montier | May 2010
In this paper, James Montier makes the case that policy portfolios are flawed from an investment perspective, with two common failings being a mis-measurement of risk and an indifference to valuation.
Back to Basics: 6 Questions to Consider Before Investing
Ben Inker | November 2010
In this white paper, Ben Inker, Director of Asset Allocation at GMO, offers six basic questions investors might ask in their efforts to form reasonable conclusions about those asset classes and strategies that fit best with their investment objectives, and what kind of long-term returns might be expected from them.
The Seven Immutable Laws of Investing
James Montier | March 2011
James Montier shares what he believes to be the key principles to sound investment.
My Sister's Pension Assets and Agency Problems
Jeremy Grantham | April 2012
The central truth of the investment business is that investment behavior is driven by career risk. In the professional investment business we are all agents, managing other peoples’ money. Professional investors pay ruthless attention to what other investors in general are doing. The great majority “go with the flow,” either completely or partially. This creates herding, or momentum, which drives prices far above or far below fair price. There are many other inefficiencies in market pricing, but this is by far the largest.
The What-Why-When-How Guide to Owning Emerging Country Debt
Tina Vandersteel | May 2012
In this white paper, GMO’s Emerging Country Debt team presents the case for owning emerging debt. Originally produced in 2012, this 2017 edition includes current facts, updated figures, and more FAQ answered as compared to the original.
Profits for the Long Run: Affirming the case for Quality
Kim Mayer | June 2012
In this 2012 white paper, the Quality Strategy team discusses the way in which a fundamental focus on profitability remains the best way to minimize the true risk with which investors should be concerned.
Waiting for the Last Dance
Jeremy Grantham | January 2021
The long bull market since 2009 has matured into an epic bubble, featuring extreme overvaluation, explosive price increases, frenzied issuance, and hysterically speculative investor behavior.
Let the Wild Rumpus Begin
The first U.S. Bubble Extravaganza: Housing, Equities, Bonds, and Commodities
Jeremy Grantham | January 2022
Previous equity superbubbles had a series of distinct features that individually are rare and collectively are unique to these events. In each case, these shared characteristics have already occurred in this cycle. The checklist for a superbubble running through its phases is now complete and the wild rumpus can begin at any time.