Investment Chart Kondratiev Wave

Investment Chart Kondratiev Wave

Monday, 8 November 2010

Shame on me: Dylan Grice (2)

To my (and hendrik Jan's) surprise also Dylan Grice called his column last Friday something with shame (Shame On Me). Hendrik Jan touched an open nerv with is remark that Dylan Grice has lost his bearishness on Emerging Markets.
In his Friday column Grice wittingly described how the humans are quite inventive for over a 50.000 years without needing quantitative easing.
I utterly agree with him that productivity growth is the most important for economic growth and that crying about deleveraging is not that important when you want to explain economic growth % (but of course, Grice wanted to tell the opposite, that we are lost for quite some time because of deleveraging; but now he wanted to divert the attention to put the shame on the Fed because of QE2 what will be a success I think).
Grice makes plausible in his charts based on valuations according to the Shiller-PE's that you should not expect too much of equities in the coming years (valuation are not good enough according to him, but I'm quite satisfied with current valuations).
But then he gives the expected returns of the most important emerging markets, the Bric's. And suddenly you see lots of optimism. So it is not yet clear what has happened with Dylan Grice, maybe he is indeed a fraud as he describes himself and is he no longer a bear on everything, since he is writing something positive on emerging markets for the second time.

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