What's out there?
(The following is excerpted from the year-end commentary by Litman Gregory.)
Our message has been consistent, even as new information unfolds, that deleveraging will mean slower growth at the same time it raises the risk of another financial crisis. That said, an important part of our investment discipline is to minimize the risk of “confirmation bias.” Confirmation bias refers to the human tendency to seek out and favor information and data that supports one’s beliefs, arguments, etc. Our attempt to avoid confirmation bias in our decision-making involves lots of debate among our team and exposing ourselves to alternative points of view through our reading and working our extensive industry network. Most important, our scenario approach forces us to think through a variety of possible outcomes. With that context, the next part of this commentary lists a variety of bullish factors that, though counter to our base-case view, could drive stocks to strong returns over the next five years.
(Visit Litman Gregory)