Ben Inker and Jeremy Grantham, the notorious bears at the Boston investment firm Grantham, Mayo, Van Otterloo & Co., in their new quarterly letter heap doubt on whether the US bull market can last much longer.
For a decade, Inker writes, the US has been outperforming, especially compared with lackluster emerging markets. But he pokes holes in the notion that the United States is "special,'' its stocks inherently superior even as they grow more pricey.
"We cannot completely reject the possibility that those arguments are correct, but the evidence seems pretty thin,'' Inker says.
Grantham, meanwhile, a famous and wealthy environmental philanthropist, hammers away at investors' blind preference for good news. He argues that this bias can lead down dangerous paths, whether in stock investing, understanding of climate change science, and even some American's notion that the United States is superior to France in all things.
Citing federal and international statistics, Grantham says France's median hourly wage has risen 180 percent in 45 years; Japan's is up 140 percent, while Britain's has risen 60 percent. But the US median wage has been "dead flat for 45 years."
From income inequality to health care and education, Grantham argues, the US is lagging, yet we have a "broad and heavy bias away from unpleasant data."
"We are dealing today with important issues, one so important that it may affect the long-term viability of our global society and perhaps our species," Grantham writes. "It may well be necessary to our survival that we become more realistic, more willing to process the unpleasant, and, above all, less easily manipulated through our need for good news."