Hence, I believe GMO’s Jeremy Grantham -- who has a longer history and a better track record than almost everyone else on this subject -- has the right take. He suggests that although "mean reversion in margins and price-earnings ratios is still probable, the speed of regression has slowed way down and become sticky." In other words, markets always return to more rational pricing and may be doing so now, but they can take a very long time to get there.
In light of that, I suggest being wary of acting on models used by financial analysts that suggest the business cycle has peaked.
This column was provided by Bloomberg News.