All Permabears Turning Bullish, Corpses Throwing Cash At Market

First Roubini moderating his expectations on the temperature in Hades, now Jeremy Grantham, chairman of $85 billion Grantham Mayo Van Otterloo is urging investors to move money from cash to stocks before "rigor mortis" sets in. As Jeremy, who now has large share of his capital riding on a market upswing says:

"Remember that you will never catch the low. Sensible value-based investors will always sell too early in bubbles and buy too early in busts. But in return, you may make some important extra money on the roundtrip as well as lowering the average risk exposure. If you invest too little after talking about handsome potential returns and the market rallies, you deserve to be shot."

Today's amazing case of mass amnesia where such things as Buffett warning on the state of the macro economy, S&P500 earnings forecasts and multiples, geopolitical instability and what not
will be happy to be propped by Grantham's words: "investors should make the shift from cash to stocks in a "few large steps" instead of all at once. GMO started reinvesting in stocks in October [roughly 5 months before his market rallying call] and has a schedule for more moves based on future market declines."

Grantham's shift in outlook is curious as he has been considered one of the original permabears because of his grim outlook on stocks for more than a decade and his warning in January 2008 to shift to cash.

Amazing what one letter from the chairman of a partially nationalized bank will do to the market. And for the permacynics out there, what more contrarian indicator than permabears trying to stage a rally...

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