James Montier: valuations are way too high

The market is completely discounting the risk to the economy and operating as if there is nothing to worry about, pricing in a V-shaped recovery, says James Montier, investment strategist at GMO.

James Montier, investment strategist, GMO

Investors normally overreact at extremes, James Montier, the value-investing guru who serves on GMO’s asset allocation team, tells Barron’s: they value stocks at “peak multiples on peak earnings and trough multiples on trough earnings”. But this time, it’s different. “Instead of following the collapse in earnings, the market is completely discounting [the risk] and operating as if there is nothing to worry about … and has priced in a V-shaped recovery.”

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