No, it’s not a new law firm, each of these renowned investors have put out new thoughts/predictions in the past week. The wonderful aspect of markets is that there can be wildly differing viewpoints but that several strategies/approaches can do well. So be prepared to sit down and spend hours on them.

Byron Wein – Blackstone

Content:

-Review of the Ten Surprises of 2020

-Ten Surprises for 2021 (here’s two):

  • The economy develops momentum on its own because of pent-up demand, and depressed hospitality and airline stocks become strong performers. Fiscal and monetary policy remain historically accommodative. Nominal economic growth for the full year exceeds 6% and the unemployment rate falls to 5%. We begin the longest economic cycle in history, surpassing the cycle that lasted from 2010 to 2020.
  • Even as energy company executives cut estimates for long-term growth, near-term opportunities are increasing. The return to “normal” increases both industrial activity and mobility, and the price of West Texas Intermediate oil rises to $65/bbl. Rig counts increase and energy high yield bonds rally soundly. Energy stocks are among the best performers in 2021.

Link: https://pws.blackstone.com/education-insights/article/blackstone-quarterly-webcast-the-ten-surprises-of-2021/

Howard Marks – Oaktree

Content:

-Value vs Growth (interesting snippets below):

  • Despite these points, I don’t believe the famous value investors who so influenced the field intended for there to be such a sharp delineation between value investing, with its focus on the present day, low price and predictability, and growth investing, with its emphasis on rapidly growing companies, even when selling at high valuations. Nor is the distinction essential, natural, or helpful, especially in the world world in which we find ourselves today.
  • I guess the answer is “value is where you find it.”

Link: https://www.oaktreecapital.com/docs/default-source/memos/something-of-value.pdf

Jeremy Grantham – GMO

Content:

-Blowing bubbles (interesting snippets below):

Perhaps most troubling of all: Nobel laureate and long-time bear Robert Shiller – who correctly and bravely called the 2000 and 2007 bubbles and who is one of the very few economists I respect – is hedging his bets this time, recently making the point that his legendary CAPE asset-pricing indicator (which suggests stocks are nearly as overpriced as at the 2000 bubble peak) shows less impressive overvaluation when compared to bonds. Bonds, however, are even more spectacularly expensive by historical comparison than stocks. Oh my!

Either way, the market is now checking off all the touchy-feely characteristics of a major bubble. The most impressive features are the intensity and enthusiasm of bulls, the breadth of coverage of stocks and the market, and, above all, the rising hostility toward bears. In 1929, to be a bear was to risk physical attack and guarantee character assassination. For us, 1999 was the only experience we have had of clients reacting as if we were deliberately and maliciously depriving them of gains. In comparison, 2008 was nothing. But in the last few months the hostile tone has been rapidly ratcheting up. The irony for bears though is that it’s exactly what we want to hear. It’s a classic precursor of the ultimate break; together with stocks rising, not for their fundamentals, but simply because they are rising.

Link: https://www.gmo.com/asia/research-library/waiting-for-the-last-dance/

  1. Wow ! thanks for sharing. If I were a younger man, I would increase my meds and refresh myself on the art of straddles. Have a great year!

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