Demand For Metals Has Slowed Sharply, And Information Giant Has Missed Short Opportunities.

Jeremy Grantham, founder and chief strategist of Asset Management Co GMO, is famous for predicting the market bubble, but this time he has lost sight of it. Jeremy Grantham has warned since 2011 that the world will deplete natural resources and the price of mineral resources will remain high. But he admitted in a quarterly letter to investors on Tuesday that he was wrong.

"I could have made a lot of money by shorting up the mineral bubble, just like we were shorting the other three major asset bubbles in the past 20 years," he said in his letter. "My positive proposal for the medium term (10 years) of mineral resources seems to be a major mistake, especially for iron ore and bauxite."

How could he make such a big mistake? Jeremy Grantham said he saw a series of unusual resource statistics in 2011, which convinced him that China's economic growth, coupled with the global population growth, will bring all the demand to its peak.

"I have warned before, if China is right," he wrote. Metal As demand growth slows rapidly, there will be trouble. But China's demand is much lower than I thought before. China has almost ceased its demand for iron ore, and I have completely ignored the possibility of such extreme consequences. He added that metal demand may not rebound quickly or sharply.

The LMEX Metals Index, the London Metal Exchange, has fallen by 49% after hitting its five year high in February 2011. Jeremy Grantham said he did not anticipate that China's demand for minerals would be reduced so rapidly.

GMO is a large Asset Management Co located in Boston, USA. As of March 31st, GMO's asset management scale was US $99 billion. The investment strategy of the company is the comprehensive use of tradition. Investment method And quantitative models to find undervalued securities and markets.

Speaking of stock market, Jeremy Grantham thinks that equity market The price is still too high. At present prices, pension and other institutions are unlikely to achieve their long-term target of 5% yield per annus, let alone 7%. If you are lucky, a portfolio of 60% stocks and 40% bonds may get a 3% gain.