NEW YORK ( TheStreet) -- We are now in the season when, from an investing perspective, cash is "king" once again.GMO Chief Investment Strategist Jeremy Grantham channeled himself through a spokesperson recently and stunned members of the Value Investor Conference in London by confessing that the investment firm was 50% in cash. GMO, the famous Boston-based contrarian investment firm, manages about $100 billion in assets mostly for institutions and the wealthy. At the conference the GMO spokesman warned that it now considers all western stock and bond markets to be ominously overpriced. The firm believes that from current market levels most investors are likely to lose money, after factoring in inflation, over the next seven years or so. The firm considers China to be in a dangerous bubble but it did say it still saw some opportunities in other emerging markets. It moved to 50% cash and cash equivalents awaiting better buying levels. From an asset allocation standpoint, being 50% in cash may sound very bearish. From my viewpoint it looks opportunistic, and follows the "Jim Cramer model" of always having enough cash to buy the dips. U.S. stocks are still expensive with a price-to-earnings ratio for the S&P 500 somewhere around 16.5, up from 14.7 at the end of 2012. With third quarter earnings season about to begin the "E" in P/E, earnings, isn't looking too bright. So the notion that we should be mostly invested in stocks right now may not be prudent. If you own stocks with ridiculously high P/E like Amazon ( AMZN) and Netflix ( NFLX) you may be "cruising for a bruising". To illustrate my point Netflix is trading with a P/E of about 407 and a forward (1-year) P/E ratio based on anticipated earnings of almost 100. The current stock price trades at nearly 100 times next year's EPS. My point about having cash right now can also be emphasized by a question. Would you rather own 20 shares of Netflix at $327-per-share now, or have $6,450 the next time NFLX corrects to a 52-week low? Its 52-week low was $57.40 on Friday.