Jeremy Grantham GMO January 2011 Letter – Pavlov’s Bulls

The always anticipated quarterly letter by GMO’s Jeremy Grantham is out, and I’ve embedded the 13 page piece below. He does a quick review of the past year, a look forward to the year (plus) ahead, and then a quite in depth piece on bubbles from a value investors standpoint. If you only have a few minutes to spare I’d recommend page 4 for a top down overview. If you are feeling antsy about missing the Bernanke Train to the heavens there is a bemusing story about Isaac Newton and the South Sea Bubble on page 10.

Bigger picture Grantham makes the case the Fed can take this market to S&P 1500, and with the heartfelt belief that the 3rd year of a presidential cycle is the best,along with The Bernank Put sitting as support for the market, animal spirits shall remain high. At least through October. Of course longer term we have experienced multiple times in just the past decade what happens when an asset class subsidized by the Federal Reserve returns to a ‘free market’ trajectory, hence his caution in longer term time frames.

As always, *it* will only matter when it matters – and until then we party like Romans from the 2nd century AD, and everyone can be an investment genius.

Please click ‘fullscreen’ for the easy way to read this:

hat tip Zero Hedge

About Mark Hanna 542 Articles

Affiliation: Hanna Capital, LLC

Mark Hanna is President and Owner of Hanna Capital, LLC, a registered investment advisory firm. Mark has been a follower of markets since the late 80s, with a focus on individual equities since the mid 90s. He has been a well known commentator in the financial blogosphere for the past 5 years, following a career in corpoporate finance and accounting. Mark attended the University of Michigan where he graduated with a degree in Economics.

As an avid reader, Market Montage is the personal blogging site for Mark to share his views on economics, markets, and the like. Occasional cynicism and wit shall be deployed in his postings.

Follow Mark on Twitter @fundmyfund.

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