Bruce Greenwald on the Market: CIMA Conference ~ market folly

Wednesday, March 28, 2012

Bruce Greenwald on the Market: CIMA Conference

Continuing the series of notes from the CIMA conference (Columbia Investment Management Association), we present Bruce Greenwald's introductory comments. Greenwald is the Robert Heilbrunn Professor of Finance & Asset Management at Columbia Business School.

Bruce Greenwald's Introductory Comments

1. Apocalyptic viewpoint is almost never justified. At the absolute worst, it will be a decline of 1-2% in economic activity, much less than the 5-8% in 2009. (Not true of Greece & Portugal).

2. Through the crisis, corporate profits other than financial sector have been extraordinary. Even Deere & CAT had profit declines of 40-50%, but no losses.

3. Securities are not grossly mispriced if you look at growth expectations. 8-12% likely stock moves based on operating earnings. No bubble in stocks. 3% on 30-year government bonds, with no inflation protection, seems risky.

For the rest of the notes from the CIMA Conference, head to these posts:

- Dan Loeb: Lessons He's Learned as an Investor

- David Einhorn Question & Answer Session

- Distressed Investing Panel (Dan Loeb & Daniel Krueger)

- Bruce Berkowitz's Basic Checklist for Investing & What He's Learned

- Long/Short Equity Investing Panel (Whitney Tilson)

- Bill Miller on What Stocks He Likes Now

- Michael Karsch on Risk Management

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