Permabear Dylan Grice of Societe Generale has been under a bit of scrutiny of late. The target: previous reports he wrote suggesting there were ways to make money off of markets going higher (Japan due to inflation and EM).
Albert Edwards, his colleague, defended him yesterday.
But now Grice has launched a defence of himself, including a description of human evolution, how he made a bad call by picking Wayne Rooney for his fantasy football team, and how Mr. Market has mood swings.
But then he goes ahead and makes his 10 year forecasts for global equity markets. But why?
From Societe Generale (emphasis ours):
As someone gleefully concluded upon reading my work on the nascent bubble developing in EM, I’ve really just ‘lost the faith’ and don’t have the decency to come out and say so: shame on me!!! Well now the cat’s out of the bag and I’m nothing more than a fraud, I may as well come totally clean. Remember all that stuff I wrote about forecasts being bunk and forecasters being idiots? That was a front too. Inside are my 10y forecast returns for world equity markets.
His assessment shows that Germany and France seem to have the best possible returns for their equity markets, at 6-7% for France and 5% for Germany. He warns though:
Clearly these countries have problems, such as having … er… fiscally challenged governments and being part of an… uhm… troubled currency system but at least you’re getting some sort of compensation for the risks being taken …
But Grice isn’t finished with his (somewhat) bullish predictions. He then targets emerging markets, saying it’s nearly impossible to get accurate estimates.
I’m not sure how much weight I’d place on these estimates and I wasn’t sure if I should include them but then I thought, who really cares? When the wind is blustering in our faces and we can’t hear ourselves speak, it can only mean one thing: the deafening roar overhead of helicopter Ben dropping his manna from heaven! What could possibly go wrong?
These are for 10 year returns, note the effacing title: