Ben Inker (GMO) and the Definition of Investing Insanity

Sometimes one comes across a written piece that so succinctly expresses a held point of view that the only job in hand is to circulate it.

The captioned piece (below) by Ben Inker of GMO’s asset allocation group delves into the phenomenon of price insensitive buyers of bonds and the havoc they may reek just if they cease to buy.

He describes the consequent overvaluation of long term bonds, focusing on the UK inflation linked series where pension legislation crowds providers into “insane” investments.

His probability based explanation of why equities will prove (with a 99% probability) a better investment than the 2062 Index Linked bond should be decisive to any rational investor.

Inker (GMO)_Price Insensitive Sellers

 

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By |2015-08-07T14:52:27+00:00August 7th, 2015|Asset Class Returns, Cerno Capital Posts, Other Posts|

About the Author:

James is a co-founder of Cerno Capital and lead manages a number of the firm’s collective and private portfolios. After qualifying as a chartered accountant in London (Coopers & Lybrand, 1989) he relocated to Asia. Between 1991 and 2004 he worked as an equity analyst, head of research, and latterly as an equity strategist at WI Carr, Paribas, HSBC and UBS, based variously in Hong Kong, Singapore and Jakarta. James graduated from the University of St Andrews, Scotland with an MA in Philosophy & Logic in 1986. James is a Member of the Chartered Institute for Securities & Investment.