"The strangest of creatures- the fully invested bear." James Montier, GMO

Investing at times can be a strange "game". Or to be more precise, investors at times can behave strangely. Take Exhibit 2 below. More US fund managers think US shares are overvalued than at any other time over the last 20 years - including the peak of the 2000 dot com bubble and the peak in August 2007. And yet, reports James Montier, the same people who did this survey (see Exhibit 2), "showed fund managers to still be overweight in equities" - as you can see in Exhibit 3. This tells us a lot about a range of things:

• It tells us about how most fund managers are driven by quarter to quarter performance, "forcing them" to to index huggers and "relative performance managers". (Do you really want one of these to manage your money?)

• It tells us about investors .... the fear of missing out .... buying what has done best recently ... short-term focus ... ignoring fundamentals.

But in this market, for those of us with a longer time horizon, it also tells us about how the lemmings rush towards the precipice ... while commonsense would have suggested caution.

James Montier's full newsletter is here https://www.gmo.com/docs/default-source/research-and-commentary/strategies/asset-allocation/the-advent-of-a-cynical-bubble.pdf?sfvrsn=4