MFOHome About Commentary Discussions Funds The Best Resources Support Us!

Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

Sign In Register

Categories

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

GMO Latest

sma3
in Other Investing
https://www.gmo.com/americas/research-library/american-unexceptionalism_gmoquarterlyletter/

While it may sound like continued data to defend their decades long sluggish performance because of over emphasis on Emerging Markets and International stocks, they have some very interesting data about comparisons of growth rates between US and international equities.

A lot of US results are due to the Dollar and increasing valuations. If both of these are as high as they can go and due to fall it will not be positive for US equities

Comments

  • mskursh
    Jeremy's next big prediction after getting the real estate fiasco correct was to begin heavily divesting from us markets and focusing on emerging markets. He has basically reiterated that stance for 15 years. since then, emerging markets have been 4X'ed by the US market. So eventually they'll be right. but to the normal investor who invests some in international, its going to take quite a correction to make up for 15 years of garbo returns in VWO.

    signed person who overweights EM in his international allocation and has for 7 years.
  • a2z

    if one covers enough grantham material, it is clear that his experience prioritizes survival\defense over timing bubbles.
    he has long since abandoned AUM as any kind of marker for his strategy; GMO is far above the minimum needed for a firm its size to continue.
  • mskursh
    He was on a episode of the Compound with Josh Brown and Michael Batnick. I was super impressed with Grantham and his ability to speak intelligently about markets, the past, future estimates. But I still can't get around how poorly he's navigated the past 15 years.
  • Chinfist
    edited August 23
    I can understand how high valuations can impede a rise in the U.S. stock market, but whatever happened to the concept that a weaker dollar benefits U.S. stocks, at least stocks of companies that export (which I would guess would not be an insignificant percentage of the S&P 500). Do tariffs now negate this?
  • FD1000
    edited August 23
    He has been wrong for over 15 years.
    Hussman and Arnott have been wrong for as long.
    These people forgot that markets collapse many times based on special conditions/situations.
    2008-MBS
    2018-Fed raised rates 3-4 times within a year.
    2020-Covid
    2022-Inflation made the Fed raise rates very rapidly.

    Valuation models aren’t gospel. They’re frameworks, often rigid ones. Markets don’t “obey” a PE ratio, a CAPE model, or any single metric. They move based on flows, positioning, liquidity, sentiment, and risk appetite — none of which those “experts” fully capture.

    Articulation ≠ expertise. Some people build reputations on talking smoothly on CNBC or writing clever papers. But if you look under the hood, their track records are mediocre or not disclosed at all. A true expert has numbers behind them, not just words.

    Macro talk rarely drives short-term results. Tariffs, inflation debates, and political narratives — they sound convincing, but the link between those stories and stock prices in the next 1–12 months is weak. Liquidity and momentum can swamp those factors.

    The real experts are rare. They don’t talk much because they’re too busy managing money. They know the limits of prediction and don’t oversell their opinions.

    So, how can anyone listen or invest with these guys?






  • Observant1
    edited August 23
    "So, how can anyone listen or invest with these guys?"

    The long-term performance for GMO Quality Fund - Class III (GQETX) has been very good.
    https://testfol.io/?s=4SKuOpC7IR2

    GMO offers a newer ETF (QLTY) which follows the same strategy but omits foreign stocks.
Sign In or Register to comment.