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 investor's 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
[Oct 27, 2010: Jeremy Grantham GMO October 2010 Letter - Night of the Living Fed]
[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]