career risk is not at all evenly spread across all investment levels. Career risk is very modest, for example, when you are picking insurance stocks. Picking oil, say, versus insurance is much more visible and therefore more dangerous. Picking cash or “conservatism” against a roaring bull market probably lies beyond the pain threshold of any publicly traded enterprise. It simply cannot take the risk of being “wrong” about the big picture for 2 or 3 years, along with the associated loss of business. Expensive markets can continue on to become obscenely expensive 2 or 3 years later, as Japan and the tech bubble proved. Thus, because asset class selection packs a more deadly punch in the career and business risk game, the great investment opportunities are much more likely to be at the asset class level than at the stock or industry level. - Jeremy Grantham
Posted on: Thu, 03 Oct 2013 08:23:58 +0000
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