Posted on 02/26/2022 6:12:36 AM PST by Roman_War_Criminal
Let's discuss value investor Jeremy Grantham's thesis on "super bubbles" and his target for the S&P 500.
For almost a half-century, value-investing icon Jeremy Grantham has been calling market bubbles. Now, he says U.S. stocks are in a “super bubble,” only the fourth in history, and poised to collapse.
Please do yourself a big favor and play the above interview in entirety.
It's not a fluff interview. Bloomberg's Erik Schatzker grills Jeremy Grantham right from the get go about Grantham's view a year ago.
Q&A Snips
Schatzker: At the risk of putting words in your mouth, you are as certain [now] as you were then, if not more?
Grantham: I would say clearly more. I did freely admit, not in our conversation, but elsewhere, that I wasn't quite as certain about this bubble a year ago as I had been about the tech bubble of 2000 or as I had been in Japan or as I had been in the housing bubble of 2007. I used to think in terms of near certainties. This time I felt highly likely bit perhaps not nearly certain. Today I feel it is just about nearly certain.
Grantham discusses "crazy behavior" , noting that even in 1929 you had some magnificent rallies.
Schatzker: If you are right and stocks are in a multi-sigma deviation from the statistical trend, tell me what happens. The S&P 500 peaked at almost 4800 points. What is the bottom?
Grantham: The trend line, being slightly generous, is 2500. And most of the great bubbles, the super bubbles go below trend and stay there for quite a while. In 2000, the Nasdaq came down 82 percent but the Federal Reserve raced to the rescue so loudly and strongly they stopped the decline in the S&P at the trend line, It only declined 50 percent. This time trend is at most 2500. And I would expect, even if the Federal Reserve tries to do the same it will be hard to prevent the market from declining to that level.
Mish: There's much more in the interview. The above only covers 9 of 37 minutes.
I did not think the market we come back the end of this week. I would’ve thought that it would’ve stayed down longer. But I have a feeling that they don’t believe this conflict in Ukraine is going to last long
I have no doubt crashes are in our future, that said i get weary of those always announcing the imminent crash. I guess ya, eventually they will be right. Is that really useful though?
Always predicting tragedy will of course eventually be right some day.
Cash is King....but wait till after the dead cat bounce.
Mish has been predicting an imminent crash since he got his start on the “Big Kahuna a Myth” thread on Siliconinvestor in the late 90s.
We’ll likely continue to be in a bear market for several more months, but because of rate increases, not the Ukraine situation.
This doesn’t mean the market will crash. Some of the most aggressive rallies are in bear markets. They are periods of greatly increased realized volatility.
I don’t know about anyone else but when I need real financial advice I always turn to a blog with tons of pop up ads for help
Mish is a broken record, I remember hearing him talking about the end of the world with Y2K.
What’s the other aphorism?
“You can’t remain solvent longer than the market can remain irrational”
The best way for an individual to succeed is to not be overly greedy and take profits off the table as you go along.
LOLOL!!!! BUY GOLD! BUY GOLD!
Follow the Pelosi family investments apparently, you’ll be fine to pretty well off.
“LOLOL!!!! BUY GOLD! BUY GOLD!”
If it all falls apart, you’d have been better off buying 9X19. Unless you plan on using the gold as bullets instead of lead.
No man ! Buy Bitcoin!!!
Come on man!!
Who?
Buy lead & brass.
I don't see how that one applies to me at all. I don't buy or sell on margin, and I don't place bets on the direction of the market with money that I might need in the foreseeable future.
Will have to check out Mish’s website again. Used to be one of my go to sites. But he started injecting a lot of personal political viewpoints into his analysis and I bailed in 2012-2013.
I think the market has been allowing for a Ukrainian fiasco for a few months. After the move was made and Biden didn’t airlift the 82nd in, the market has perhaps written the conflict off as pretty much over. In reality, getting the Ukraine aligned back in the Russian sphere might be seen as plus on Wall Street as it does stabilize the area.
The thing that keeps stocks up is low interest rates. Where do you put your money? Cash? Inflation will devour it? Savings? Low interest plus inflation. Real Estate? Very expensive and probably overpriced just like stocks. Crypto? If the stock market bubble does burst expect Bitcoin to triple in value very quickly.
Lead, brass etc yes. A fire fight in Vietnam typically consumed 10,000 rounds. A zombie apocalypse would probably lead to multiple fire fights to protect those Corn Flakes you have stashed. Just sayin’
“In reality, getting the Ukraine aligned back in the Russian sphere might be seen as plus on Wall Street as it does stabilize the area.”
I see WEF giving up Ukraine to Russia for better management, perhaps? (Russia and Ukraine produce 25% of worlds wheat).
Sorry for the folks in Ukraine.
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