Capital Allocators – Inside the Institutional Investment Industry Ben Inker – Value Investing at GMO (First Meeting, EP.17)
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Mar 30, 2020 Ben Inker, head of the Asset Allocation team at GMO, brings nearly thirty years of experience to the table. He shares valuable lessons from his Yale professors and discusses the struggles of value investing in today's tech-driven economy. Among key topics, he highlights the challenges facing value strategies and how government intervention impacts economic stability. Inker also emphasizes the need for critical thinking in investment decisions and reflects on the importance of understanding market dynamics for successful portfolio management.
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Investing Framework
- Effective investing requires a clear understanding of your approach and the relevant information.
- Focus on essential information and avoid agonizing over irrelevant details, Inker learned from his professors.
Market Volatility Insight
- Shiller's analysis of market volatility revealed a significant gap between fair value and actual market volatility.
- This gap suggests a degree of predictability in the market, according to Shiller.
Lesson on Replacement Cost
- Inker recalls a lesson from James Tobin about replacement cost during a research project on oil prices.
- Tobin emphasized that replacement cost, not past or future prices, should primarily drive market prices.