Jeremy Grantham’s 1Q09 Letter: Fantastic as usual

[scaredyclassic]

there are no great minds in finance. there is only luck.

[davelj]

[quote=Arraya]Ok, this guy has a few good, obvious points, a ton of useless historical information, extreme unrealistic optimism in other areas and big, glaring, flashing-red blind spots.

First off, the claim that housing is in overcorrection is based on what? We have deflationary forces pushing the mean down, a massive inventory control project going on and if it was not for tax payer propped up programs the sales volume would almost be cut in half. That does not portend a overcorrection phase.

He claims the parroted line that we will have small growth by the end then low growth after that is based on what. A feeling? Because it happened before? Based on what data?

He heavily weights the presidential cycle theory? Are you serious? Something economists noticed that sort of, kind of happens when presidents are elected. That is not logic. It is voodoo guesswork based on nothing but, it happened before.

His investment advice seems decent for short term investing and that is about it. Understanding the economic consequences in the real world and looking beyond what the market might do in the short term is a much different story.

I predict he will make huge revisions on this and blame some unseen event or something somebody did wrong.

[/quote]

I actually agree that the Presidential Cycle theory seems like a bit of hocus pocus. But that’s a trading observation based on the historical fundamentals of monetary policy within election cycles. As such, it’s not without a logical underpinning. But I’m not a trader, so I don’t really care about it.

Grantham is one of the few folks that nailed the asian stock bubble, the tech bubble, the credit bubble, and the global housing bubble well in advance. The guy understands bubbles and, like Jim Grant, has an encyclopedic knowledge of financial history.

Regarding Grantham’s overall understanding of finance and investing vis-a-vis yours, I can say with some degree of confidence that he’s forgotten more about finance in the last five seconds than you know.

Having said that, opinions are like assholes – everybody’s got one. But some opinions are more well-founded than others.

[davelj]

[quote=Arraya]Ok, this guy has a few good, obvious points, a ton of useless historical information, extreme unrealistic optimism in other areas and big, glaring, flashing-red blind spots.

First off, the claim that housing is in overcorrection is based on what? We have deflationary forces pushing the mean down, a massive inventory control project going on and if it was not for tax payer propped up programs the sales volume would almost be cut in half. That does not portend a overcorrection phase.

He claims the parroted line that we will have small growth by the end then low growth after that is based on what. A feeling? Because it happened before? Based on what data?

He heavily weights the presidential cycle theory? Are you serious? Something economists noticed that sort of, kind of happens when presidents are elected. That is not logic. It is voodoo guesswork based on nothing but, it happened before.

His investment advice seems decent for short term investing and that is about it. Understanding the economic consequences in the real world and looking beyond what the market might do in the short term is a much different story.

I predict he will make huge revisions on this and blame some unseen event or something somebody did wrong.

[/quote]

I actually agree that the Presidential Cycle theory seems like a bit of hocus pocus. But that’s a trading observation based on the historical fundamentals of monetary policy within election cycles. As such, it’s not without a logical underpinning. But I’m not a trader, so I don’t really care about it.

Grantham is one of the few folks that nailed the asian stock bubble, the tech bubble, the credit bubble, and the global housing bubble well in advance. The guy understands bubbles and, like Jim Grant, has an encyclopedic knowledge of financial history.

Regarding Grantham’s overall understanding of finance and investing vis-a-vis yours, I can say with some degree of confidence that he’s forgotten more about finance in the last five seconds than you know.

Having said that, opinions are like assholes – everybody’s got one. But some opinions are more well-founded than others.

[davelj]

[quote=Arraya]Ok, this guy has a few good, obvious points, a ton of useless historical information, extreme unrealistic optimism in other areas and big, glaring, flashing-red blind spots.

First off, the claim that housing is in overcorrection is based on what? We have deflationary forces pushing the mean down, a massive inventory control project going on and if it was not for tax payer propped up programs the sales volume would almost be cut in half. That does not portend a overcorrection phase.

He claims the parroted line that we will have small growth by the end then low growth after that is based on what. A feeling? Because it happened before? Based on what data?

He heavily weights the presidential cycle theory? Are you serious? Something economists noticed that sort of, kind of happens when presidents are elected. That is not logic. It is voodoo guesswork based on nothing but, it happened before.

His investment advice seems decent for short term investing and that is about it. Understanding the economic consequences in the real world and looking beyond what the market might do in the short term is a much different story.

I predict he will make huge revisions on this and blame some unseen event or something somebody did wrong.

[/quote]

I actually agree that the Presidential Cycle theory seems like a bit of hocus pocus. But that’s a trading observation based on the historical fundamentals of monetary policy within election cycles. As such, it’s not without a logical underpinning. But I’m not a trader, so I don’t really care about it.

Grantham is one of the few folks that nailed the asian stock bubble, the tech bubble, the credit bubble, and the global housing bubble well in advance. The guy understands bubbles and, like Jim Grant, has an encyclopedic knowledge of financial history.

Regarding Grantham’s overall understanding of finance and investing vis-a-vis yours, I can say with some degree of confidence that he’s forgotten more about finance in the last five seconds than you know.

Having said that, opinions are like assholes – everybody’s got one. But some opinions are more well-founded than others.

[davelj]

[quote=Arraya]Ok, this guy has a few good, obvious points, a ton of useless historical information, extreme unrealistic optimism in other areas and big, glaring, flashing-red blind spots.

First off, the claim that housing is in overcorrection is based on what? We have deflationary forces pushing the mean down, a massive inventory control project going on and if it was not for tax payer propped up programs the sales volume would almost be cut in half. That does not portend a overcorrection phase.

He claims the parroted line that we will have small growth by the end then low growth after that is based on what. A feeling? Because it happened before? Based on what data?

He heavily weights the presidential cycle theory? Are you serious? Something economists noticed that sort of, kind of happens when presidents are elected. That is not logic. It is voodoo guesswork based on nothing but, it happened before.

His investment advice seems decent for short term investing and that is about it. Understanding the economic consequences in the real world and looking beyond what the market might do in the short term is a much different story.

I predict he will make huge revisions on this and blame some unseen event or something somebody did wrong.

[/quote]

I actually agree that the Presidential Cycle theory seems like a bit of hocus pocus. But that’s a trading observation based on the historical fundamentals of monetary policy within election cycles. As such, it’s not without a logical underpinning. But I’m not a trader, so I don’t really care about it.

Grantham is one of the few folks that nailed the asian stock bubble, the tech bubble, the credit bubble, and the global housing bubble well in advance. The guy understands bubbles and, like Jim Grant, has an encyclopedic knowledge of financial history.

Regarding Grantham’s overall understanding of finance and investing vis-a-vis yours, I can say with some degree of confidence that he’s forgotten more about finance in the last five seconds than you know.

Having said that, opinions are like assholes – everybody’s got one. But some opinions are more well-founded than others.

[davelj]

[quote=Arraya]Ok, this guy has a few good, obvious points, a ton of useless historical information, extreme unrealistic optimism in other areas and big, glaring, flashing-red blind spots.

First off, the claim that housing is in overcorrection is based on what? We have deflationary forces pushing the mean down, a massive inventory control project going on and if it was not for tax payer propped up programs the sales volume would almost be cut in half. That does not portend a overcorrection phase.

He claims the parroted line that we will have small growth by the end then low growth after that is based on what. A feeling? Because it happened before? Based on what data?

He heavily weights the presidential cycle theory? Are you serious? Something economists noticed that sort of, kind of happens when presidents are elected. That is not logic. It is voodoo guesswork based on nothing but, it happened before.

His investment advice seems decent for short term investing and that is about it. Understanding the economic consequences in the real world and looking beyond what the market might do in the short term is a much different story.

I predict he will make huge revisions on this and blame some unseen event or something somebody did wrong.

[/quote]

I actually agree that the Presidential Cycle theory seems like a bit of hocus pocus. But that’s a trading observation based on the historical fundamentals of monetary policy within election cycles. As such, it’s not without a logical underpinning. But I’m not a trader, so I don’t really care about it.

Grantham is one of the few folks that nailed the asian stock bubble, the tech bubble, the credit bubble, and the global housing bubble well in advance. The guy understands bubbles and, like Jim Grant, has an encyclopedic knowledge of financial history.

Regarding Grantham’s overall understanding of finance and investing vis-a-vis yours, I can say with some degree of confidence that he’s forgotten more about finance in the last five seconds than you know.

Having said that, opinions are like assholes – everybody’s got one. But some opinions are more well-founded than others.

[davelj]

[quote=scaredycat]there are no great minds in finance. there is only luck. [/quote]

Spoken like someone who has lost a lot of money in the markets. Or failed to pull the trigger to make any.

I would revise your quote to read: “There are few great minds in finance. There is a lot of luck.”

But that’s just me. To each his own.

[davelj]

[quote=scaredycat]there are no great minds in finance. there is only luck. [/quote]

Spoken like someone who has lost a lot of money in the markets. Or failed to pull the trigger to make any.

I would revise your quote to read: “There are few great minds in finance. There is a lot of luck.”

But that’s just me. To each his own.

[davelj]

[quote=scaredycat]there are no great minds in finance. there is only luck. [/quote]

Spoken like someone who has lost a lot of money in the markets. Or failed to pull the trigger to make any.

I would revise your quote to read: “There are few great minds in finance. There is a lot of luck.”

But that’s just me. To each his own.

[davelj]

[quote=scaredycat]there are no great minds in finance. there is only luck. [/quote]

Spoken like someone who has lost a lot of money in the markets. Or failed to pull the trigger to make any.

I would revise your quote to read: “There are few great minds in finance. There is a lot of luck.”

But that’s just me. To each his own.

[davelj]

[quote=scaredycat]there are no great minds in finance. there is only luck. [/quote]

Spoken like someone who has lost a lot of money in the markets. Or failed to pull the trigger to make any.

I would revise your quote to read: “There are few great minds in finance. There is a lot of luck.”

But that’s just me. To each his own.

[scaredyclassic]

ummm. NO great minds. ALL luck. there are some great bs’ers.

like, name a great mind. there are none. there are guys who had lucky runs when things were lined up with their line of bs.

I’m up pretty good this year, silver gold and oil. Actually, I’ve been doing good the last few years, all bear/gold all the time.

but I don’t think i know anything. I’ve been a little lucky lately. the universe it temporarily lined up with my bad attitude…and I always expect to lose…and I always believe everyone is lying to me…and I expect any lucky run i ahve won’t last…

[scaredyclassic]

ummm. NO great minds. ALL luck. there are some great bs’ers.

like, name a great mind. there are none. there are guys who had lucky runs when things were lined up with their line of bs.

I’m up pretty good this year, silver gold and oil. Actually, I’ve been doing good the last few years, all bear/gold all the time.

but I don’t think i know anything. I’ve been a little lucky lately. the universe it temporarily lined up with my bad attitude…and I always expect to lose…and I always believe everyone is lying to me…and I expect any lucky run i ahve won’t last…

[scaredyclassic]

ummm. NO great minds. ALL luck. there are some great bs’ers.

like, name a great mind. there are none. there are guys who had lucky runs when things were lined up with their line of bs.

I’m up pretty good this year, silver gold and oil. Actually, I’ve been doing good the last few years, all bear/gold all the time.

but I don’t think i know anything. I’ve been a little lucky lately. the universe it temporarily lined up with my bad attitude…and I always expect to lose…and I always believe everyone is lying to me…and I expect any lucky run i ahve won’t last…

[scaredyclassic]

ummm. NO great minds. ALL luck. there are some great bs’ers.

like, name a great mind. there are none. there are guys who had lucky runs when things were lined up with their line of bs.

I’m up pretty good this year, silver gold and oil. Actually, I’ve been doing good the last few years, all bear/gold all the time.

but I don’t think i know anything. I’ve been a little lucky lately. the universe it temporarily lined up with my bad attitude…and I always expect to lose…and I always believe everyone is lying to me…and I expect any lucky run i ahve won’t last…

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