GMP’s Jeremy Grantham is the man. His latest remarks at WSJ on where we are in the fear / greed cycle are most interesting.
“It doesn’t have the characteristics of a bubble. A simple way of defining a bubble is that it has to have nearly perfect fundamentals which have to be irrationally extrapolated with considerable euphoria. Remember the style from 2000, Japan in ‘89, or the US housing market (house prices will never decline), or 1929 in the old days was a classic. We have none of that euphoria. We also have very imperfect fundamentals.”
“It’s only the other day that people were lining up to commit 10, 20, 30 year money for a guaranteed no real return. This is not a real prescription of mad desire to invest in the stock market.”
“Getting back to your question about whether this time is different. Value managers always say this time is never different. But it is fair to say that this time, it is decently different.”