When it comes to market practitioners there is a small list of people I absolutely never miss. In my opinion, the following analysts or money managers have established themselves as the very best thinkers in our business. Most importantly, however, they have established themselves as being multidimensional. They not only understand the markets in which they practice, but they understand the dynamics that influence these markets and have developed a well-rounded and systematic process in understanding and analysing these markets. A great market thinker does not only understand one market or sector. They establish themselves as having a unique understanding of all markets with the understanding that all markets are intertwined and being an “expert” in one segment of the market without a vast knowledge of the others is futile. The following is my market practitioner & analyst must read list:
James Montier – Montier is one of the newest members of the GMO analyst team. The former Societe Generale analyst is one of the great market thinkers of our time. Montier has done much of the preeminent work on market psychology and value investing over the course of the last 20 years. He has a unique understanding as to how markets are influenced by human psychology and few do a better job of connecting the dots than Montier does. He blogs on occasion at http://behaviouralinvesting.blogspot.com/ and does regular research for GMO. You can find his resource page here.
John Hussman – John Hussman is a Stanford PhD and the founder of The Hussman Funds. He has differentiated himself from the rest of the mutual fund industry by displaying a keen understanding of risk adjusted returns. And his actual returns show it. Although his funds have underperformed in recent years, Mr. Hussman has displayed an impressive outperformance since inception – and inception involved starting an equity mutual fund at one of the very most inopportune moments in the history of investing (near the peak of the Nasdaq bubble). Mr. Hussman’s weekly letter is chock full of educational nuggets. It’s an absolute must read and can be found weekly at his website.
Jeff Gundlach – Jeff Gundlach has established himself as one of a handful of the truly great bond investors in the world today. I always tell people if I could draft one person to start a new firm with it would be a fixed income guy. They’re generally more patient, rational and detail oriented. Gundlach certainly fits the mould. His funds are consistently in the top 1% of their class and he has proven over the long-term that he is the true bond king. His work can be found at his new firm’s website, DoubleLine Capital.
Jan Hatzius – Love his firm or hate it, the Goldman Sachs Chief Economist is probably the very best analyst at any of the big banks. Hatzius is one of the few analysts who has established himself as having a keen understanding of the monetary system and the way that government policy can be implemented in a manner that helps achieve private sector prosperity. He is one of the few who consistently uses Wynne Godley’s work, appreciates Hyman Minsky and mixes in a deep understanding of the more mainstream economic thinkers. Hatzius isn’t just an economic geek, however. He has proven that he understands how the business cycle relates to markets and provides invaluable research to the clients of Goldman Sachs.
Michael Mauboussin – Mauboussin is likely the preeminent Wall Street analyst with regards to market psychology. The Chief Investment Strategist at Legg Mason has been one of the leaders in the evolving field of behavioural finance. From a tactical perspective, his work is absolutely vital in understanding the markets and the ways that psychology impacts them. Strategically, Mauboussin’s work is crucial in formulating a game plan for tackling the investment world. You can see his research and work at his website. http://www.michaelmauboussin.com/
Niels Jensen – Jensen is likely the only one on the list who not a household name, but he should be. The former Goldman Sachs trader now runs his own firm Absolute Return Partners out of London and pens the must read monthly newsletter under the same name. His work can be found at the Absolute Return site.
Jeremy Grantham – Grantham is the only true legend on the list. He is the founder of Grantham Mayo Van Otterloo (GMO) and well known for making some of the great macro calls of our lifetime. Grantham is most famous for being one of the great bubble spotters of this era. He correctly called both the Nikkei bubble as well as the Nasdaq bubble. His macro work has earned him a reputation as one of the legends of the industry. His work can be found at the GMO site.
* I’ve had many requests for broader reading lists so I hope to get around to that when I have some time. In addition, I hope readers will add to this list. I am sure there are people I’ve missed or good analysts and managers I am not aware of.
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