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The Best Thing You’ll Read Today

The latest from James Montier is out and as is always the case, it’s excellent.  Here’s a snippet:

“As a general rule we average across the various models we use to generate our best forecast as to where real returns are likely to head, rather than relying upon one signal model (without exceptionally good reason). Doing so currently results in our expectation of a -1.1% real return for the S&P 500 over the next seven years (see Exhibit 12). We continue to believe that the weight of valuation evidence suggests the S&P 500 is significantly overvalued at its current levels. Some call us “valuation bears”; we argue that we are simply valuation realists!”


Read the full piece here.  If that link doesn’t work you can access it through the GMO website.

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