I'm with Warren Buffet on this. Here are a few of his quotes:
I bought my first stock in 1942, in the summer of '42. I was 11 years old. And so 75 years have gone by. And I have never known what the market's going to do the next day. And that's not my game. My game is to decide whether I'm in the right economy, which America's definitely been ever since that time. The Dow has gone from 100 to 21,000 during that time. And no matter what the headlines say, or terrible things are happening - we were losing the war in the Pacific when I first bought stocks.
It’s always been a mistake to bet against America, since 1776.

Certainly a fine quote, but that's a very general statement about US investments. It's a great country for investors : )

But I think in this particular instance the salient message is a different one: that if you buy your investments at a high price, you'll get a lower rate of return. What has Mr Buffett had to say about that?

In an article in Fortune in November 1999, Mr Buffett made pretty much the exact same reasoning as GMO did in the link in the top post.
Full article here Berkshire Hathaway: PDF document

The core quote is is prediction that the next 17 years (1999-2016) could not offer returns anything like the 17 years just ended (1982-1999 real total return 14.80%/year).

"Let me summarize what I've been saying about the stock market: I think it's very hard to come up with a persuasive case that equities will over the next 17 years perform anything like—anything like—they've performed in the past 17. If I had to pick the most probable return, from appreciation and dividends combined, that investors in aggregate—repeat, aggregate—would earn in a world of constant interest rates, 2% inflation, and those ever hurtful frictional costs, it would be 6%. If you strip out the inflation component from this nominal return (which you would need to do however inflation fluctuates), that's 4% in real terms. And if 4% is wrong, I believe that the percentage is just as likely to be less as more."

It's hard to overemphasize how radically low his "real 4%" prediction seemed to most observers at the time. A substantial fraction of investors were expecting something like 20% a year to be normal.

Since this was more than 17 years ago, we know how things turned out. The S&P 500 real total return in the 17 years after the publication date was 2.42%/year, or about 1.58%/year lower than his guess.

It's not that either GMO or Mr Buffett are making market predictions as such. They shouldn't be vilified when these comments don't turn out to have been prophetic, nor lionized when they do. They're just observing the obvious: entry prices matter. If you pay twice as much for anything, you'll get half the return on your dollar. And vice versa, of course. Valuations might be normal or abnormal at any given single future date, but for a very broad asset class the likely rate of return is surprisingly predictable for any ending date that has roughly "normal" valuations.

The US economy is going to grow only so fast in the next 10 years. That number is bounded to a pretty small range. Only so much of that is going to end up as corporate sales of US firms, and only so much of *that* is going to end up as net corporate profits, and (if it's an average valuation day) investors in the future will pay only so much for that level of aggregate earnings. The specifics are unknown, but the broad strokes are fairly bounded.

Jim