bubble territory

The Street.com excerpted some of the more salient quotes from Grantham's recent newsletter. From their site:

"While euphoria sweeps stock markets here and worldwide, there are at least a few voices of dissent. One, unsurprisingly, is legendary value investor Jeremy Grantham - the man Dick Cheney, plus a lot of other rich people, trusts with his money. Grantham ... has been a voice of caution for years. But he has upped his concerns in his latest letter to shareholders. Grantham says we are now seeing the first worldwide bubble in history covering all asset classes.

"'Everything is in bubble territory,' he says. 'Everything. The bursting of this bubble will be across all countries and all assets.'

"'From Indian antiquities to modern Chinese art,' he wrote in a letter to clients this week following a six-week world tour, 'from land in Panama to Mayfair; from forestry, infrastructure and the junkiest bonds to mundane blue chips; it's bubble time!'

So, does he counsel you to run for the hills? No. Their study of bubbles suggests there is a short but dramatic "exponential" phase before the bubble bursts. He writes:

"My colleagues suggest that this global bubble has not yet had this phase and perhaps they are right. ... In which case, pessimists or conservatives will take considerably more pain."