But the immediate question posed by anyone with a 401(k) is: How will the market fare this coming year? Grantham ­reminds us of the predictability of presidential cycles, which reveal a "remarkable" set of data. Historically, during the first year of a presidency, the market is up very slightly. In the second, it's down significantly; in the third, it rockets upward; and in the fourth, it's up more marginally.

That kind of pattern isn't random. As they start to face reelection prospects in their third year, administrations tend to goose jobs, cut interest rates, and spend the cash necessary to make sure the economy is humming when voters go to the polls. And here's the good news: We'll soon be entering the third year of the younger Bush's second term. If historical patterns hold, that could mean a pleasant year for investors, although Grantham doesn't recommend you count on this. "In the end," he says, "value is more important than these technical indicators."

Of course, in Grantham's view, the fundamentals don't warrant such a powerful bull run. It almost pains him to ­admit it. But he's enough of a realist to know that pure reason doesn't always drive the markets. "You don't get rich fighting Year Three," he quips.

The Real World:
Thinking and Investing Globally
Grantham loves to make his investors rich - investors who reportedly include longtime political foes John Kerry and Dick Cheney (although the tight-lipped company declines to discuss its clients). His firm has outperformed the
market for seven consecutive years.

That's partly thanks to Grantham's global perspective, which helps him spot opportunities around the world. And that stems from his upbringing: A native of England, he studied at the University of Sheffield before making his way to Harvard Business School. As a self-styled mid-Atlantic personality - one whose stubborn English ­accent remains, if only in watered-down form - he sees U.S. stocks as only one piece of a much larger puzzle.