Unlocking Hidden Opportunities
Monthly Market Commentary: December 1, 2020
The indefatigable value investor Jeremy Grantham recently opined on CNBC that, "The one reality that you can never change is that a higher-priced asset will produce a lower return than a lower-priced asset. You can’t have your cake and eat it. You can enjoy it now, or you can enjoy it steadily in the distant future, but not both – and the price we pay for having this market go higher and higher is a lower 10-year return from the peak."
I agree with Grantham entirely. But equally, if stocks have gone down significantly over some years then the future return become attractive. I am mentioning this because following my review of depressed emerging markets last month, I decided to spend some time looking for depressed stocks and sectors around the world (not only in emerging markets) and to see if the strength in FAANG and related stocks had not obscured the fact that a very large number of stocks were extremely depressed from a longer-term perspective. Not surprisingly I actually found hundreds of depressed stocks even in the US, where the overall stock market is in the sky.
I wish my readers Merry Christmas and good Health.
As Mahatma Gandhi said,
"It is health that is real wealth and not pieces of gold and silver."