A month ago we presented a must read interview by Swiss Finanz und
Wirtschaft with respected value investor Howard Marks, in which, when
explaining the motives driving rational investing he summarized simply, “in the end, the devil always wins.” Today, we are happy to bring our readers the following interview with one of our favorite strategists, GMO’s James Montier, in which true to form, Montier packs no punches,and
says that the market is now overvalued by 50% to 70%, adding that there
is “nothing at all” that has an attractive valuation, and that he sees
a “hideous opportunity set.”
Still, despite the clear bubble in stocks, he is unsure what to do since financial repression could last very long with “the average length of periods of financial repression in history is 22 years. We’ve only had five years so far.”
Finally on the topic of Japan and Abenomics, “for me, there is too much
hope and expectation embedded in Abe, not unlike Obama in 2009: There
was so much hope projected into Obama that he could only disappoint.” He
did, well… everyone but the 0.001% billionaires. Then again in a world
in which there is only hope left, what happens when that too is removed?
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