Investors Share Gloomy Outlook at Conference
Morningstar Investment Conference kicks off with pessimistic panel discussion.
The 16th Annual Morningstar Investment Conference began with decidedly cheerful gloom. The opening panel, "Divining the Future," featured Smith Barney muni-bond guru Joe Deane, Grantham, Mayo, Van Otterloo & Co.'s ultrabear Jeremy Grantham, and Bob Rodriguez, star manager of both bond and equity portfolios at First Pacific Advisors. If the panel has divined the future accurately, investors are in deep trouble.
Grantham called the stock market's performance in 2003 a "brutal rally" because it gave investors hope during a bear market that he thinks is by no means over. He called his expectation of an investment "black hole" in 2005 "optimistic." Rodriguez had only a four-letter word for investors: cash. Deane, whose gloomy view seemed relatively rosy by contrast, said that bonds were extremely overpriced but that the first economic rally in decades to include not only the United States, Europe, and Japan, but also potentially India and China was a possibility. He estimates the likelihood of such an event to be no better than 50%.