I have always been a fan of Jeremy Grantham, who is the chief market strategist at GMO (he's the "G" in the firm's name). While he's not always right on the markets, he always seems to have a thoughtful and interesting viewpoint, grounded in a more rigorous quantitative discipline than many commentators.
I liked Jeremy's recent quarterly letter, since it discusses how he is struggling to make sense of market that continues to move higher despite only modest economic growth. Here's an excerpt from the piece, with a link to the full piece below:
So now, Bernanke begs us to speculate, and we are obedient. Despite being hammered down twice in 10 years and getting punished for speculating, we again pick ourselves up off of the canvas and get back into the good fight. Such persistence is unprecedented – 20 years for each really painful experience has been the normal recovery time – but Uncles Ben and Alan have treated us so well in these two disasters that, with hindsight, they don’t feel so bad after all. Yes, the market is still down a lot in over 10 years and on our data is likely to have a
second consecutive very poor decade, but we have had two wonderful recoveries in which the more speculative you were, the more money you made. So why not break the historical rules and try a third time? Perhaps this time it will be lucky.
JGLetter_ALL_1Q10.pdf (application/pdf Object)
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