Money and Finance

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James Montier interview (LINK)

One shouldn’t dwell too much on the semantics of a bubble. We at GMO define bubbles as a two standard deviation move away from the long term trend. And we are not quite there yet. We’d need another 10 to 15%. But let’s say it in simple terms: For all purposes, this is a hideously expensive market. I don’t care if it’s a bubble or not. It’s too expensive, and I don’t need to own it. But because this is a central bank sponsored near bubble, it hurts to stay away.

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Be patient. Don’t take it from me, take it from Winnie the Pooh: Never underestimate the value of doing nothing. Never forget: You can’t know the future. Hold a lot of dry powder now. 50% of our portfolio today is in cash or some form of short term bond holdings. If we do get a dislocation in equity markets, we will have the ability and deploy that dry powder. That’s the time to buy.

Jason Zweig: Lessons From Oil's Black Friday (LINK)

The Absolute Return Letter, December 2014: A Brave New World (LINK)

Over the next decade, the investment world is likely to be quite different from anything we have seen over the last 30 years or so. Interest rates will stay low for much longer than nearly anyone is currently predicting, the dividend investor will return to glory, passive equity management will win substantial market share from active managers, fees will fall much further than they already have, and some investment strategies which are only alternative by name, will struggle to survive in their current form.

Farnam Street - Innovation: The Attacker’s Advantage (LINK)

Related book: Innovation: The Attacker's Advantage

Charles Brandes sees the value in sticking to his hunch (and Russia) [H/T ValueWalk] (LINK)

Related book: Brandes on Value: The Independent Investor

Matt Ridley: Ants, altruism and self sacrifice [H/T The Browser] (LINK)

Book of the day (which was recommended by Alan Watts in You're It!: On Hiding, Seeking, and Being Found): Memories, Dreams, Reflections - by C.G. Jung

- Links
Jason Zweig on WealthTrack (video) (LINK) Related book: The Devil's Financial DictionaryEven Michael Lewis Was Surprised Hollywood Bet on The Big Short [H/T Linc] (LINK) Related book: The Big ShortWhy and how do Munger and Buffett...

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For those interested, we've filed as a substantial shareholder on our second Australian name at Boyles. The details of which can be seen HERE. Jason Zweig: GOOD ADVICE, OR ADVICE THAT SOUNDS GOOD? (LINK) Robert Shiller on CNBC (video) (LINK)...

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Peter Bernstein on risk (video) [H/T The Big Picture] (LINK) Related book: Against the Gods: The Remarkable Story of RiskSafal Niveshak: How to Be Happy and Get Rich (some lessons from a re-reading of Poor Charlie’s Almanack) (LINK) Nathaniel...

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GMO's Q1 Letter (LINK) GMO's 1Q 2015 Letter includes Ben Inker's discussion on long-term government bonds in "Breaking Out of Bondage" and Jeremy Grantham's "Are We the Stranded Asset? (and other updates)," a discussion of long-term growth...

- Comments From Felix Zulauf, James Montier And David Iben
Link to: We will continue to swim in a sea of liquidityJames, we have slow growth, no inflation, low interest rates and easy monetary policy as far as the eye can see. Are we living in the best of all worlds for investors? James Montier: How...

Money and Finance