The puzzle behind blue chip valuations
they say, that value stocks are cheap enough. issuable in relation to the market or to growth stocks.
Lex about that, what Jeremy Grantham of GMO writes about, that this fact is somewhat surprising (puzzle) and finds two explanations for this.
1) demography. more retired – shift in their portfolios, blue chips are sold to pay bills, and also as a result of a shift towards fixed income instruments. non-blue chips in such portfolios have already been sold.
2) striving for diversification (remember immediately that, that the more people strive to diversify – the less diversification will result from) – & quot; alternative asset classes & quot;: private equity, хедж фонды, сырье и т.п. all this can be called an alpha search (difference between benchmark and portfolio) to which we also apply the principle – the more participants – so much the worse for everyone.
eventually, value stocks need to be sawed;)
слышал (логичную) idea about, that in the second half of the year you can shift from growth stocks to value stocks. if you don't expect total failure, then the idea of 'defensive assets" discredited by events 2008 years can really make sense.
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Commodities slowdown ahead
, whatever slowdown in the US / China economy, no cost cuts in Europe have stopped raw materials on their way to April highs. and the events with wheat just distract from, what to look at first and foremost and globally. from my side, the growth of raw materials seems to me primarily a function of the previous decline (including in the context of demand). though, if CRB goes out of range, it will make you think.
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If central bankers want to regain some credibility, they should rethink their modus operandi now, before monetary extremism starts to seem normal. They should recognise that smooth growth is not theirs to create. Central bankers can pay attention to more variables, but they are not powerful enough on their own to keep the global economy well balanced.
disaster avoidance, what the Central Bank can add to the asset can contribute to the growth of a sense of omnipotence. economic activity can be supported, but it cannot be stimulated for a long time (sometimes it works, but in the presence of accompanying factors). QE2 – хороший тест для FED. if QE2 starts & quot; to avoid double dip & quot; & quot;, it will mean, what a double dip" has already arrived, or, that monetary irresponsibility – this is reality.
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dubious thought, but interesting. due to the ban on working with private equity and hedge funds, major players can shift focus from principal investments to AM.
