Michel Pireu Columnist

“I think there have always been two major approaches to managing money,” says Jeremy Grantham in an interview with Patrick O’Shaughnessy at The Investor’s Field Guide. “And one of them, which was effective in the 1920s and is equally effective today is — at the individual stock level in particular — to focus on unappreciated changes in the future. What is going to happen ... deduce what the market thinks and look for unappreciated changes, good and bad, and bet against the market.”

So what might a bet against the market look like right now? One bet a lot of investors seem willing to take is that the apparent disconnect between the stock market and the economy is normal. This is a bet Fisher Investments explains best when it says: “The vast majority presume the market must be incorrect, driven by too-high hopes and Fed [US Federal Reserve] policy, with a reversion in store once investors come to grips with just how bad things are. We acknowledge the possibility, but we also thi...

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