GMO strategist Montier warns markets are in a 'cynical bubble' that 'greedy' investors don't want to miss out on

'Fully invested bears'

James Montier, strategist and member of the asset allocation team at GMO, has said a "cynical bubble" in markets has been created, where investors pile into equities through fear of missing out on returns.

In a note entitled The Advent of the Cynical Bubble, Montier said this scenario is based on the belief that everyone thinks they will be able to get out before anyone else. He highlighted recent surveys from the Bank of America Merrill Lynch which showed the highest level of fund managers citing "excessive valuations" ever but they were found to still be overweight equities. "This gives rise to the existence of that strangest of creatures: the fully-invested bear. The most common rationale for such a cognitively dissonant stance is 'the fear of missing out on the upside' (aka FOMO - f...