As for timing, he concedes that's impossible to predict. But here's the kicker: Even Grantham thinks you probably need to be bullish right now. The reason? Most bubbles, he notes, go through a short but dramatic "exponential phase" just before they burst. Like Japan in 1989 or the Internet in early 2000.
This journalist has given a very selective reading of what Grantham actually wrote. Here is Grantham's own writing of point #11, after 10 points establishing why he believes there is a worldwide bubble and why he believes it will pop.
" Of course the tricky bit, as always, is timing. Most
bubbles, like internet stocks and Japanese land, go
through an exponential phase before breaking, usually
short in time but dramatic in extent. My colleagues
suggest that this global bubble has not yet had this phase
and perhaps they are right. (A surge in money flowing
into private equity might cause just such a hyperbolic
phase.) In which case, pessimists or conservatives
will take considerably more pain. Again?!"
He knows that many of his clients are relative performance people- being right in the interemediate to longer term won't help them if they lose their clients or jobs from relative underperformance in the short term.
The best records will come to those who time it perfectly, but if one doesn't have to stay leaving a party too early can be better than leaving too late.
Ha
