Jeremy Grantham, GMO’s Chief investment strategist, recently released his 4Q 2011 newsletter and its quite the read at 14 pages. He covers his thoughts on investing in general, capitalism today and investment observations for 2012

Some brief points to take away from it:

• Overpricing exists in debt markets such as the US and UK
• Stocks aren’t cheap nor are they expensive based upon their internal models
• For investing in stocks to work during an inflationary period, one has to have a several-year horizon as earnings always catch up.
• If there is less bad weather, agriculture prices could fall a lot.

Go to here to read the full paper:

http://www.gmo.com/websitecontent/JGLetter_LongestLetterEver_4Q11.pdf