Jeremy Grantham & Cia, es decir el fabuloso equipo de GMO,
acaban de publicar su Quaterly Letter. Como todas las anteriores,
una lectura obligatoria. El informe completo, aquí. http://www.gmo.com/websitecontent/JG_LetterALL_11-12.pdf
The bottom line for U.S. real growth, according to our
forecast, is 0 .9% a year through 2030, decreasing to
0.4% from 2030 to 2050 (see table on Page 16).
This is all done presuming no unexpected disasters, but
also no heroics, just normal “muddling through.”
GDP measures must be improved so that they begin to
measure output of real usefulness or utility. The current
mish-mash of costs and of “goods” and “bads” produces
poor and even damaging incentives.
Accurate measurements of growth must eventually include
the full costs of running down our natural assets. True
income (said Hicks) is meant to allow for sustained
productive capacity, which our current measures clearly do
not. If they had done so the developed countries might well
have been in reverse for the last 20 years.
Investors should be wary of a Fed whose policy is premised
on the idea that 3% growth for the U.S. is
normal. Remember, it is led by a guy who couldn’t
see a 1-in-1200-year housing bubble! Keeping rates down
until productivity surges above its last 30-year average
or until American fertility rates leap upwards could be
a very long wait!
Some of the investment implications of this low growth
outlook and the Bernanke optimism will be addressed next time
So where does that leave us with our asset allocation
portfolios at GMO? Pretty much where we were before. We
own significant amounts of short duration assets in accounts
where such assets are an option, with the recognition that the
longer rates are repressed, the greater the opportunity cost of
We are doing this because the risks around jumping into long
duration assets under the assumption that low interest rates
make them more valuable leaves us more vulnerable to taking
losses if that policy winds up not lasting as long as investors
assume it will. The strong move in equities and other long
duration assets in the months up to the announcement of QE
infinity may be “justified” on the basis of a promise from the
Fed of low rates for longer, but buying assets whose prices are
only justified by low discount rates is an inherently dangerous
way to invest, and we responded by taking down our equity
weights modestly in asset allocation portfolios where permitted.
If the Fed is true to its word, inflation does not
up, and the various nasty events out there (China hard
landing, euro blow-up,
cliff, etc.) either don’t happen or cause less trouble than
we fear they might, our “prudent” holding of short duration
assets in the face of uninspiring asset valuations will wind up
costing us and our clients money.
are crossed that, despite our reservations, Fed policy
actually works, because we can then go back to a world where
we aren’t faced with the ugly idea that stocks priced to
deliver 2% real might be “fairly priced” after all. If
investors see through the game the Fed is playing, however, we
could be in for a long wait.