Grantham: you must recognise that markets are incredibly inefficient because of career risk

Grantham: you must recognise that markets are incredibly inefficient because of career risk. When a bubble gets going, playing against it is bad for business and dangerous for the career of the investing professional, so most professionals will not make the trade that should be made. However, the forming and breaking of bubbles are the few real opportunities that institutional professional have to earn their keep. Grantham maintains you cannot have a bubble unless you have wall-to-wall elegant rationalisations. Every single bubble had very smart people come out and argue that it was quite reasonable because there had been some permanent change that made the odd data irrelevant, he said. This makes him think that we are beginning to get the pre-conditions of a bubble now. Read more views from the Tiger21 conference here: (VIEW LINK)