Low interest rates, disruptive new business models, the ongoing impact of globalisation – you can come up with plenty of theories as to why share prices are so expensive just now. But well-known value investor Jeremy Grantham has produced an elegantly simple model that explains market booms and busts stretching back for nearly 100 years. His explanation? People are just really bad at investing.
I look at his behavioural model in more detail on this week’s strategy page. But it boils down to a very simple observation – investors will pay more for stocks [...]