Jeremy Grantham’s 4Q09 Letter

[EconProf]

Jeremy Grantham is one of those thinkers you just have to pay attention to, so accurate have been his analyses of our past experience. And he thoroughly and accurately skewers my fellow economists, who have not only failed to predict, but often contributed to our travails.

[CA renter]

Thank you very much for sharing that, davelj.

This really rang true for me:

The real trap here, and a very old one at that, is to be
seduced into buying equities because cash is so painful.
Equity markets almost always peak when rates are low,
so moving in desperation away from low rates into
substantially overpriced equities always ends badly.
—————-

We’ve been sitting all in cash since last Oct/Nov, and to say it’s painful is an understatement. Still, as a fairly contrarian investor, I always think the best mid-to-long-term investment is whatever is most painful at the moment (and what everyone else doesn’t want to be in). We will see how long this situation lasts…could still be many years, unfortunately.

[CA renter]

Thank you very much for sharing that, davelj.

This really rang true for me:

The real trap here, and a very old one at that, is to be
seduced into buying equities because cash is so painful.
Equity markets almost always peak when rates are low,
so moving in desperation away from low rates into
substantially overpriced equities always ends badly.
—————-

We’ve been sitting all in cash since last Oct/Nov, and to say it’s painful is an understatement. Still, as a fairly contrarian investor, I always think the best mid-to-long-term investment is whatever is most painful at the moment (and what everyone else doesn’t want to be in). We will see how long this situation lasts…could still be many years, unfortunately.

[CA renter]

Thank you very much for sharing that, davelj.

This really rang true for me:

The real trap here, and a very old one at that, is to be
seduced into buying equities because cash is so painful.
Equity markets almost always peak when rates are low,
so moving in desperation away from low rates into
substantially overpriced equities always ends badly.
—————-

We’ve been sitting all in cash since last Oct/Nov, and to say it’s painful is an understatement. Still, as a fairly contrarian investor, I always think the best mid-to-long-term investment is whatever is most painful at the moment (and what everyone else doesn’t want to be in). We will see how long this situation lasts…could still be many years, unfortunately.

[CA renter]

Thank you very much for sharing that, davelj.

This really rang true for me:

The real trap here, and a very old one at that, is to be
seduced into buying equities because cash is so painful.
Equity markets almost always peak when rates are low,
so moving in desperation away from low rates into
substantially overpriced equities always ends badly.
—————-

We’ve been sitting all in cash since last Oct/Nov, and to say it’s painful is an understatement. Still, as a fairly contrarian investor, I always think the best mid-to-long-term investment is whatever is most painful at the moment (and what everyone else doesn’t want to be in). We will see how long this situation lasts…could still be many years, unfortunately.

[CA renter]

Thank you very much for sharing that, davelj.

This really rang true for me:

The real trap here, and a very old one at that, is to be
seduced into buying equities because cash is so painful.
Equity markets almost always peak when rates are low,
so moving in desperation away from low rates into
substantially overpriced equities always ends badly.
—————-

We’ve been sitting all in cash since last Oct/Nov, and to say it’s painful is an understatement. Still, as a fairly contrarian investor, I always think the best mid-to-long-term investment is whatever is most painful at the moment (and what everyone else doesn’t want to be in). We will see how long this situation lasts…could still be many years, unfortunately.

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