International Finance 542

Fall 2003

 

Some Ideas on the Harvard Case “Grantham, Mayo, Van Otterloo & Co., 2001”

 

Hint: In general, don’t waste space describing the facts nor the obvious but directly discuss the issue.

 

Issues to address:

 

·        The firm lost great amounts of capital (and fees) between 1997 and 2000. Should the management style continue to invest based on its opinions of valuation.

 

·        Evaluate the overall investment philosophy of GMVO. How does their perception of price bubbles influence their strategy.

 

·        Do you think they should modify their strategy? Explain either way.  (hint we all know their current philosophy so don’t waste time telling us that).

 

·        The quantitative model

·        Some argue that the model eliminates perfectly good stocks? Should the model be used?

·        Should it be modified or kept as is? Why?  If modified give ideas.

·        What are some complications to international implementation.
 

·        Evaluate the concept and long-term viabilities of the ‘where-to-hide’ portfolios?

·        What are some potential complications with this strategy.
 

·        Do you agree or disagree with GMVO’s global allocation process? Any suggestions?

 

·        Evaluate any other aspect of GMVO that you find important.

·        Summarize your strategy changes for GMVO.