Commentary

A Year Of Investing In Quality Cyclicals

April 3rd marked the 1-year anniversary of the first investments deployed by GMO’s Quality Cyclicals Strategy,1 within a fortnight of the trough that ended 2020’s quickfire bear market.

Commentary

The Duration of Value And Growth

It is commonly assumed that growth stocks are bigger beneficiaries of falling interest rates than value stocks, an assumption driven by a belief that growth stocks are much longer “duration” than value stocks due to the fact that more value in growth companies comes from relatively more distant cash flows.

Commentary

Japan Value: An Island of Potential In A Sea of Expensive Assets

Global stocks and bonds are both expensive. U.S. stocks are trading at particularly elevated valuations with the CAPE ratio standing at 35x (vs. a 10-year average of less than 27x) while the Barclays Bloomberg U.S. Aggregate index offered a negative real yield at the end of February.

Commentary

A Spac-Tacular Distraction

In a new piece from the GMO Event-Driven Team, Doug Francis and Sam Klar discuss the growing supply-demand imbalance in the asset class that has driven focus towards the SPAC boom and away from the opportunity in other investments like merger arbitrage.

Commentary

GMO 7-Year Asset Class Forecast: January 2021

The GMO Asset Allocation Team has released its latest 7-Year Asset Class Forecasts through January 2021.

Commentary

GMO 7-Year Asset Class Forecast: 4Q 2020

GMO 7-Year Asset Class Forecasts: Value vs. growth is coming off its worst year ever.

Commentary

Waiting for the Last Dance

Featuring extreme overvaluation, explosive price increases, frenzied issuance, and hysterically speculative investor behavior, I believe this [bull market] event will be recorded as one of the great bubbles of financial history, right along with the South Sea bubble, 1929, and 2000.

Commentary

GMO 7-Year Asset Class Forecast: November 2020

While real return forecasts for broader markets are not particularly promising, there are some pockets that look more attractive than others. As GMO put it in the firm's recent Quarterly Letter, "Value is cheap, no matter where you look."

Commentary

Don't Wait for Another Wave

With a COVID-19 vaccine rolling out and markets enjoying a post-election relief rally, credit investors may be asking “is there any opportunity left?”

Commentary

Value: If Not Now, When?

GMO’s new quarterly letter to clients examines the worst 12-month performance for value stocks in history and explores how investors can profit from a period reminiscent of previous bubbles in global markets.

Commentary

Tonight, We Leave the Party Like It’s 1999

History does not repeat, but it rhymes, as Mark Twain observed. As such, we are struck by the eerie and dangerous parallels between today’s markets and the markets back in 1999. Back then, Value investing and Value managers were under the gun for having underperformed their Growth brethren for too long.

Commentary

Covid-19, Climate Change, and the Need for a New Marshall Plan

In a new piece – “Covid-19, Climate Change, And The Need For A New Marshall Plan” – GMO’s Jeremy Grantham discusses the impact of Covid-19 on the economy of the developed world, arguing great strides are necessary in order for the U.S. and the world to accelerate growth.

Commentary

GMO 7-Year Asset Class Forecasts: 3Q 2020

We believe this is the best opportunity set we’ve seen since 1999 in terms of looking as different as possible from a traditional benchmarked portfolio.

Commentary

The Mystery of SOE Debt

In a new white paper, Mustafa Ulukan and Sergey Sobolev from GMO’s Emerging Country Debt Team examine the notable rise of State-owned Enterprises (SOEs) in international capital markets since the Global Financial Crisis.

Commentary

2Q 2020 GMO Quarterly Letter

In a new quarterly letter to GMO clients, head of asset allocation Ben Inker highlights the sea change in the utility of government bonds and Matt Kadnar, member of GMO’s Asset Allocation team, weighs in on today’s low bond yields.