precisely where we are in the market cycle?
The challenge, according to Ben Inker, head of Asset Allocation at GMO is that the United States has never had these levels of monetary and fiscal stimulus at the same time. This gives low risk assets lower return expectations, but sends high risk assets soaring. There are obvious signs of froth — Gamestop, Bitcoin, Tesla, et. al., but even “small cap value” caught a bid. Inker believes we are clearly in an asset bubble, which he blames on Fed policies.
The legendary Boston-based institutional investment firm manages about $60 billion in assets. During Dotcom implosion, GMO’s US Aggressive Long/Short Strategy achieved 80+% cumulative net returns for their clients.