Editor’s Note: Grantham is founder of GMO, a Boston-based money manager. This is an excerpt of his latest two market commentaries. The full version of this piece is available on the GMO Website.

As you may remember, the January Rule serves as a kind of barometer for the behavior of the market in the coming year. Historically, when January was down, the rest of the year had over twice the declines than one would expect randomly, far more mediocre months, and a very sub average return. But it is far from perfect and it had...