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
[Aug 3, 2010: Jeremy Grantham GMO July 2010 Letter - Summer Essays]
[Apr 26, 2010: Jeremy Grantham GMO April 2010 Letter]
[Jan 26, 2010: Jeremy Grantham GMO January 2010 Letter]
[Oct 27, 2009: Jeremy Grantham GMO October 2009 Letter]