Hugh Hendry’s back!

Another paper I was reading on the plane. Here Mr. Hendry touches on the massive problems in China with its own debt cycle, the fixed exchange rate system and how its affecting the world today and how his fund is positioned to profit from it.

Fantastic read..

The Chinese buy in cash? Nonsense…

Want a house deposit? Ask a shipbuilder…

Source: Scribd

Jeremy Grantham’s 1Q12 letter

Another fantastic quarterly letter from Mr. Grantham, I was reading this on the plane to and from Myanmar last week and he talks about his current asset allocation thoughts and how career risk plays a role in the investment industry today. For my team and I it really does explain the situation we are in today because we are faced with this amazingly strong market here in Thailand that is just ignoring all the negative news globally to valuation levels we haven’t seen since the 90’s and we are not fully invested in it.

The central truth of the investment business is that investment behavior is driven by career risk.

Ridiculous as our market volatility might seem to an intelligent Martian, it is our reality and everyone loves to trot out the “quote” attributed to Keynes (but never documented): “The market can stay irrational longer than the investor can stay solvent.” For us agents, he might better have said “The market can stay irrational longer than the client can stay patient.” Over the years, our estimate of “standard client patience time,” to coin a phrase, has been 3.0 years in normal conditions.

Source: GMO Website