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I don't necessarily agree with Jeremy Grantham, but here's an interesting take on the markets.

For the last 5 years to this March, in dollar terms, the S&P 500 was up 35 per cent compared with 192 per cent for non-US small cap and 221 per cent for emerging markets. After these moves most diversifying and exotic assets are badly overpriced and the risk premium is the lowest it has ever been.

In fact, the new global money flows have probably created the first truly global bubble, almost everywhere in almost everything. Particularly noteworthy and the beneficiary of our twin forces are small caps everywhere which on our data are more overpriced, driven by private equity deals, than an overpriced market.

Posted by edelfenbein at April 24, 2007 9:25 PM