From the WSJ:

It feels good to be right. But the few analysts who accurately called the market’s bottom in early March aren’t feeling so great about where stocks are headed.

One of the most famous of this group, Jeremy Grantham, penned a note on March 10 entitled “Reinvesting When Terrified” that encouraged investors to buy, suggesting stocks were 30% undervalued.

Since then, the market has roared ahead, without stopping for a correction of 10% or more. Standard & Poor’s 500-share index ended last week at 1026.13, up nearly 52% from its 12½-year low on March 9 and its highest close since Oct. 6. The Dow Jones Industrial Average is at 9505.96, up 45% since its March low.

Now, the chairman of Boston asset-management firm GMO and his colleagues say the S&P 500 has zoomed right past what they consider fair value of about 880, based on earnings estimates and historical price-to-earnings ratios.

Mr. Grantham sees “seven lean years” of a sluggish market ahead, to atone for what the firm believes was a long era of overpriced stocks, according to his newsletter.

“The past 12 years have seen two bubbles that were really good for corporate profits,” says Ben Inker, GMO’s director of asset allocation. “Now things are unlikely to be anywhere near as good as people have gotten used to, because we’re not going to have a bubble to help us.”