Yesterday afternoon, Brett Arends from the Wall Street Journal talked about moving from high-risk stocks to blue chips in an effort to protect one’s portfolio during this bear market. To help him get his point across, he brought up legendary investor Jeremy Grantham. Arends wrote:

Grantham has been successfully navigating markets for decades. He was among those who predicted the recent crisis before it happened, rather than after the fact. Right now, he thinks worldwide stock markets have further to fall, and at this point he is so bearish he wants to stick his money in the mattress. “I’m long the mattress,” he jokes.

That says, he still likes, at least in relative terms, high-quality U.S. stocks: big, blue-chip companies with solid balance sheets, strong franchises, and fairly stable earnings.

His top 15 picks, as of the end of May, were Wal-Mart, ExxonMobil, Johnson & Johnson, Coca-Cola, Microsoft, Pfizer, Chevron, PepsiCo, UnitedHealth Group, Merck, Procter & Gamble, Qualcomm, Cisco Systems, Oracle Corp. and 3M.

Arends also pointed out that these stocks were the biggest holdings (in order) in Grantham’s U.S. Quality Equity mutual fund.

Tokyo, Japan
Photo by Jon Butterworth, stock.xchng

Grantham also weighed in on overseas bargains. Arends wrote:

For those who are interested, Grantham also thinks the Japanese stock market is “less expensive than most other countries,” – which, for him, is high praise.

Source:

“Protect Your Portfolio With Blue Chip Stocks”
Brett Arends
Wall Street Journal, July 9, 2008

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