Jeremy Grantham, co-founder and chief strategist of the USD120 billion asset allocation specialist GMO, has released and fascinating and candid letter to investors this quarter. He is well known for having accurately called the Tech Bubble and the US Real Estate Bubble. “Giant bubbles are easy to spot statistically but hard to call from a career risk perspective. It is easy to be early, and being early may lose you your job, your clients, and your credibility.” Despite his past success, he failed to foresee the end of China’s growth in commodity demand. He explains how promises of a ‘paradigm shift’ have consistently fooled investors into thinking a temporary change is permanent. “Every major bull event is called a paradigm shift, but they almost never exist. Almost never. But not never, ever.” In the attached letter he explores these issues in greater depth, and identifies one area that he thinks will undergo a true paradigm shift in the coming years.