Gmo Value Investing Essay

Words: 1464
Pages: 6
Open Document
Gmo: the Value Versus Growth Dilemma
Ferret out – reveal
Laggard

Overlook-ignore
GMO: The Value Versus Growth Dilemma |
1. What is value investing? What is its rationale? What are GMO’s main arguments in favor of value investing?
Value investing is a way of investing in company stocks that are considered either undervalued or out-of-favor by the market. In other word, a value investment is one where the intrinsic value of the stock is not accurately reflected in the current market valuation. The underlying reason of too much decreasing in the stock price is that the company may be losing market shares or even in trouble due to market’s panic attributed to negative rumors as well as having management problems. Since the market price …show more content…
Should GMO change its strategy now that the world has seemingly turned against it?
We propose that GMO buy some growth stocks such as technology stock and establish a new growth fund or a value-growth fund. By providing his customers an option to switch to growth stock fund during this growth stock leadership market environment, Mayo can lower the risk that his clients will switch out to other investment company. As a result, he will increase his retention rate, retain revenue, and also provide an opportunity for new investors to invest in the “trendy” growth stock fund. In addition, if GMO invest in growth stocks, it will increase the diversification of the overall portfolios; which is that when value stocks are doing well, it will help offset the growth stocks that are performing poorly and vice versa. Most importantly, GMO must provide adequate knowledge of growth stocks investing to its clients before allowing them to invest in them. This will prevent future problems, such as clients complaining about major losses if growth stock crashes one day.
4. Why wouldn’t GMO include Cisco Systems, an otherwise excellent company, in its portfolio at this time? Why is it willing to consider CVS or R.R Donnelley? What are the long-term expected returns for those stocks? Support your answers by examining P/E ratios, price-earnings
Show More

Related Documents: Gmo Value Investing Essay

The Flaws Of Finance

GMO White Paper May 2012 The Flaws of Finance James Montier This paper is based on a speech delivered at the 65th Annual CFA Institute Conference in Chicago on May 6, 2012. A s a child, watching my parents write postcards whilst we were all on holiday was an instructive experience. My mother would meticulously write out the card, scattering a few interesting holiday tidbits within the text. My father, whose sum total of postcards sent was invariably just one (to his office), opted for a considerably…

Words 6387 - Pages 26

Essay on Final Study Guide for Livanis Intl 1101

INTL 1101 Final Exam Study Guide Americanization - Consumerism, individualism - American products and values - Cultural imperialism? Trying to homogenize world? McDonaldization - Fast-food principles dominant in American and other societies - Uniform standards - Lack of human creativity - Dehumanization of social relations Infantilization - Benjamin Barber “consumed” - Against “ethos of infantilization” that sustains global capitalism - Turning of adults into children…

Words 3747 - Pages 15

The Slow Pace of Pasta Essay

except members of one’s own family (Banfield, 1958). More recently a wealth of empirical data has attested to a lack of trust in many basic institutions such as political parties, unions, big industrial companies and courts (see for example: European Values Survey, 1999–2000). These observations help us to put into context the findings from the TRUSTINFOOD survey; it would, however, be too simplistic to understand the level of trust in food simply as a reflection of the general mistrust of institutions…

Words 7942 - Pages 32