GMO's Q1 2017 Quarterly Letter

Link to:  GMO's Q1 2017 Quarterly Letter

In "Up At Night," Ben Inker takes a deep dive into the most common question he gets from clients: "What keeps you up at night?" He identifies two types of risks one should analyze, eternal risks and today’s relevant risks, and discusses how understanding one’s vulnerability to those risks is crucial in deciding whether and how to address the risks by hedging or shifting assets. Jeremy Grantham, in "This Time Seems Very, Very Different," examines how likely it is that high stock market prices and corporate profit margins will continue to be sustained. He describes why, although value investors for decades have been using the old axiom that the four most dangerous words are "this time is different," he would like to add for 2017 that "conversely, it can be very dangerous indeed to assume that things are never different."