Jeremy Grantham has done it again.

He's vented about his doom and gloom predictions on future market conditions and returns via his latest quarterly letter. And while the GMO chief believes that the upswing in stocks still has a ways to go, he also thinks it will inevitably lead to a bubble in a year or two.

"It could be derailed by disappointing global growth, profits sagging as deficits are cut, a Russian miscalculation, or, perhaps most dangerous and likely, an extreme Chinese slowdown. But I believe it probably will not end for at least a year or two and probably not before it reaches a level in excess of 2,250 on the S&P 500," he wrote. But eventually, "I'm sure it's going to end badly."

But, we're used to this tune when it comes to Grantham. He has negative views on the markets most of the time. Granted, sometimes he's right, like in 2007, when he predicted the housing bubble. But other times he's wrong, for instance when he vented at the end of 2012 that the following year was going to be a very "dangerous year" for stocks and said that investors should steer clear of U.S. equities and go for international or emerging market ones instead, when in the end, the S&P 500 rose by 30 percent and emerging market regions and countries fell by 7 to 20 percent.

All in all, his firm's "reversion to the mean" philosophy might remind you of Jared Diamond's fears that all civilizations are eventually doomed to fail. And, hey, maybe they're both right, but in the meantime, we can't help but try to build utopias and make money. So what we really want to know is, how is Grantham going to get his returns at GMO? Or is he just going to hide all the cash, and himself, under a mattress? Somehow, we doubt that.

So far, it looks like pessimism pays off in some of GMO's strategies. The GMO Global Focused Equity Fund (GGFEX), for example, returned 29.86 percent for the one year ending March 31. 

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