Radio Rallies & Reversals
All right I'm just going to cut to the end of Jeremy Grantham's Q3 newsletter:
Should we hold onto quality stocks? Moral Hazard has allowed low quality riskier stocks to outperform at the expense high quality stocks.
How far can emerging equities go? Emerging markets are fully priced, but they still sell at a discount to the 75% of the S&P500 that are not quality stocks. With their high commodity exposure, their strong finances, and their strong GDP growth - They should sell at a premium.
What about raw materials? In a developed world with 9% unemployment and masses of spare capacity, commodities are acting much too strong for this to be simply a normal responnse to a rather anemic cyclical recovery. Perhaps China truly gets that the world is running out of resources.
In Summary:
- Quality stocks are cheap;
- Stay in Emerging Markets;
- Keep a little extra cash;
- Be in commodites for the long-term.
GB
Should we hold onto quality stocks? Moral Hazard has allowed low quality riskier stocks to outperform at the expense high quality stocks.
How far can emerging equities go? Emerging markets are fully priced, but they still sell at a discount to the 75% of the S&P500 that are not quality stocks. With their high commodity exposure, their strong finances, and their strong GDP growth - They should sell at a premium.
What about raw materials? In a developed world with 9% unemployment and masses of spare capacity, commodities are acting much too strong for this to be simply a normal responnse to a rather anemic cyclical recovery. Perhaps China truly gets that the world is running out of resources.
In Summary:
- Quality stocks are cheap;
- Stay in Emerging Markets;
- Keep a little extra cash;
- Be in commodites for the long-term.
GB
posted by Gordon Bell at
7:13 AM
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