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Notes to myself, possibly of interest to others.
-- Bill Northlich

Monday, November 2, 2009

Grantham ctd. - Mkt to Grind to Halt 2Q10

...what will stop this market (my blind guess is in the fi rst few months of next year) is a combination of two factors. First, the disappointing economic and financial data that will begin to show the intractably long-term nature of some of our problems, particularly pressure on profit margins as the quick fix of short-term labor cuts fades away. Second, the slow gravitational pull of value as U.S. stocks reach +30-35% overpricing in the face of an extended diffi cult environment.

On a longer horizon of 2 to 10 years, I believe that resource limitations will also have a negative effect (see 2Q 2009 Quarterly Letter). I argued that increasingly scarce resources will give us tougher times but that we are collectively in denial...


Bill: This has consistently been my prediction/contention in various Vitus Updates (eg)

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