February 2018 saw a solid correction in the equity markets across the world. Markets are gyrating up. This correction notwithstanding, there is a lot of interesting debate on this particular bull run as the most "hated bull run". Folks at GMO have shared some interesting views.
From James Montier:
1. Markets are expensive.
2. A case of "fully invested bear". Investors agree markets are expensive, and yet are fully invested.
From James Montier:
1. Markets are expensive.
2. A case of "fully invested bear". Investors agree markets are expensive, and yet are fully invested.
From his colleague Jeremy Grantham
3. Markets are expensive, but not yet a bubble. Bubbles are best predicted by "acceleration" in price (thanks to mass euphoric psychology) rather than the absolute high level of price. Therefore expect a big bull-run ("melt-up") in 2018 before eventual crash in 2019. In author's own words:
4. Grantham's advice to investors: "What I would own is as much Emerging Market Equity as your career or business risk can tolerate, and some EAFE."
Well I would say that be micro-economy focused and keep investing on excellent assets that are still somewhat reasonably priced, and simply be patient before jumping into any equity markets - developed or developing.
