Warning: Declaration of action_plugin_safefnrecode::register(Doku_Event_Handler &$controller) should be compatible with DokuWiki_Action_Plugin::register($controller) in /home/public/dw/lib/plugins/safefnrecode/action.php on line 14

Warning: Declaration of action_plugin_blog::register(&$contr) should be compatible with DokuWiki_Action_Plugin::register($controller) in /home/public/dw/lib/plugins/blog/action.php on line 0

Warning: Declaration of action_plugin_blockquote::register(&$controller) should be compatible with DokuWiki_Action_Plugin::register($controller) in /home/public/dw/lib/plugins/blockquote/action.php on line 0

Warning: Declaration of action_plugin_include::register(&$controller) should be compatible with DokuWiki_Action_Plugin::register($controller) in /home/public/dw/lib/plugins/include/action.php on line 0

Warning: Declaration of action_plugin_popularity::register(&$controller) should be compatible with DokuWiki_Action_Plugin::register($controller) in /home/public/dw/lib/plugins/popularity/action.php on line 0

Warning: Declaration of action_plugin_redirect::register(&$controller) should be compatible with DokuWiki_Action_Plugin::register($controller) in /home/public/dw/lib/plugins/redirect/action.php on line 0

Warning: Declaration of action_plugin_captcha::register(&$controller) should be compatible with DokuWiki_Action_Plugin::register($controller) in /home/public/dw/lib/plugins/captcha/action.php on line 0

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656
Some practical investment thoughts from Jeremy Grantham [ClearOnMoney]
Top

Site

About
Contact

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656
Sitemap

Profile

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656
Trace:
Some practical investment thoughts from Jeremy Grantham

Reference

Main
Updates
Schedule

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656

Warning: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead in /home/public/dw/inc/auth.php on line 656
Commentary

Some practical investment thoughts from Jeremy Grantham

2 Mar 2012 by Jim Fickett.

Last week Jeremy Grantham's quarterly letter came out (free subscription required). This one has an unusually broad range of interesting investing advice. As always, I recommend reading the whole thing. Here are a few tidbits to tempt you:

As an individual investor, it is easy to be jealous of the research staff and connections of fund managers. But individual investors have some important advantages over professionals:

By  far  the  biggest  problem  for  professionals  in  investing  is   dealing   with   career   and   business   risk:   protecting   your   own   job   as   an   agent.     The   second   curse   of   professional   investing  is  over-­management  caused  by  the  need  to  be  seen  to  be  busy, to be earning  your  keep.    The  individual   is  far  better-­positioned  to  wait  patiently  for  the  right pitch  while  paying  no  regard  to  what  others  are  doing,  which   is  almost  impossible  for professionals.

It is interesting that Grantham is warning about inflation at just about the same time that Buffett is also sounding the alarm.

Inflation hedges

The  800-­pound  gorilla  (the  one  that  prefers  bond  holders  to  bamboo)  is  not  in  the  room yet,  but  you  can  hear  him   thumping  his  chest  up  in  the  hills.    He  will  come  eventually, and before  he  does,  you  should  remember  that  stocks  are underrated inflation hedges.

Commentators who fail to understand the perspective of long-term investors often complain that equities dive when high inflation hits. And indeed they do. But Grantham shows that over a 10-year period there is almost no correlation between inflation and equity returns. So he recommends resources and equities as inflation hedges.

Exhibit   2   shows   the   co-­incident   5-­year   relationship   between  the return for stocks, bonds, and gold, respectively,   against the CPI since 1919 in the U.S. As inflation picks up, the real price of gold goes up, the real price of bonds declines a lot, and equities decline also, but significantly less. Exhibit 3 looks at exactly the same inflation data, but adds the next 5  years  of  real  returns  for  the three  assets.    Now,  over 10 years,  there  is  only  a  very  slight  relationship   between  either gold or equities  with  the  original  5  years  of  change  in  the  CPI.

One clear resource opportunity is in natural gas (quiz question: have you heard this from anyone else???)

Natural  gas  is,  for  most   purposes  like  home  heating  and  electric  utility  plants,  a  better  and cleaner  fuel  than  oil  or  coal,  but  is  for  technical  reasons   in  distress:  there  have  been several  recent  decades  in  which  the  BTU  equivalent  price  for  natural  gas  did,  at  least  for  a   second,  reach  parity  with  oil.    But  now  it  is  at  just  14%  of  BTU  equivalency,  the  lowest  in almost  50  years. Everyone   who  has  a  brain  should  be  thinking  of  how  to  make  money on  this  in  the  longer  term.

(Emphasis added.)

Natural gas is, in fact, the most important investment opportunity I know of right now.