Stock-market legend who called 3 financial bubbles says this is the "real McCoy' of bubbles

https://www.marketwatch.com/story/stock-market-legend-who-called-3-stock-market-bubbles-says-this-on ^ | June 17, 2020 at 7:45 p.m. ET | Mark DeCambre

[wrrock]

Jeremy Grantham: ‘My confidence is rising quite rapidly that this is, in fact, becoming the fourth, real McCoy, bubble of my investment career. The great bubbles can go on a long time and inflict a lot of pain but at least I think we know now that we’re in one. And the chutzpah involved in having a bubble at a time of massive economic and financial uncertainty is substantial.’

"A market that may be the most bubblicious he’s seen in his storied career."

"Grantham is worth paying attention to due to his prescient calls over the years. He said that stocks were overvalued in 2000 and again in 2007, anticipating those market downturns, the Wall Street Journal reports. Grantham also signaled that elements of the financial market had become unmoored from reality leading up to the 2008-09 financial crisis."

[wrrock]

Today markets close mostly in red. Hertz up over 2% on Investor enthusiasm on news that stock is worthless.

[proxy_user]

The average stock is no where near bubble territory, about 15-20 times trailing earnings - about what you would expect in a low-interest environment.

[EEGator]

[Kenny Bania]

This guy’s probably got shorts out all over the place and is looking for suckers to bail him out. And MarketWatch, which has been deliberately trying to crash the economy since Trump got elected, is all too willing to oblige.

[rightwingcrazy]

“The great bubbles can go on a long time and inflict a lot of pain but at least I think we know now that we’re in one.”

He’s really putting himself out on the limb with that prediction. I’ll go farther: the market will go down after first going up, or the other way around. Eventually, and probably sooner than most people think, one of those downswings is going to be huge. Boom! Bursted bubble. My track record has been 100% in predictions like this.

[proxy_user]

Some examples from my own portfolio:

INTC - 12 times earnings
CSCO - 15 times earnings
ABBV - 10 times earnings
MO - 10 times earnings
PFE - 11 times earnings
VZ - 12 times earnings

So mature blue-chips are far from bubble territory.

[richardtavor]

I think one of three things will happen. It will go down or up, or stay the same -perhaps multiple times. I stand firmly behind my prediction.

[logitech]

Well, Glenn Beck says buy gold. So there’s that.

[EEGator]

Did he eat Cheetos and then weep?

[servantboy777]

I’ve noticed Market Watch as a website seems to post stories mostly negative toward a Trump market recovery.

[Brown Deer]

Legend Jeremy Grantham Bullish On Coronavirus Recovery
March 16, 2020

Grantham Mayo & van Otterloo (GMO) is bullish when it comes to the future of the global economy. In two separate interviews in the past week, co-founder Jeremy Grantham and head of asset allocation Ben Inker both remained positive as they discussed the future.

Are you aware of Jane Fonda’s protests against climate change? She’s been arrested several times.

Yes. Magnificent. She’s a fairly recent recruit. But where was I at age 55 [now 81]? I knew nothing and did nothing [about climate change]. There were people out there, like Prince Charles who 35 years ago moved to regenerative farming and talked a good game on climate change.

[SecondAmendment]

He is right, bubbles historically collapse whenever an incumbent Republican President runs for re-election...

[MeneMeneTekelUpharsin]

The average stock is no where near bubble territory, about 15-20 times trailing earnings.

P/E has nothing to do with it going forward and you know that. You know how much damage the economy has sustained, you know the world situation with the Chinese and Russians becoming VERY aggressive lately and you now the uncertainty with the Wuhanic Plague and the riots and statue destruction. And, you STILL post that? Hmm...

[Vermont Lt]

No sane investor believes that this market is priced accurately. It’s a Fed bubble. Trump is all about debt financing, so that shouldn’t shock a soul.

If your retirement is dependent on this market, you should set a “tolerance” marker...and bail when it hits that marker on the way down. Ad keep moving that up with the market. Otherwise, you might get knocked down and out.

[MAGAthon]

Grantham is a major manmade gloBULL warming benefactor: Wikipedia: Jeremy Grantham Views on fossil fuels and the Keystone pipeline​ He has stated his opposition to the Keystone Pipeline on the basis of the ruinous environmental consequences that its construction will bring to Alberta and to the entire planet due to the contribution that burning the extracted oil would make to climate change... Timber investment Grantham is know to be a strong advocate for investments in the timber industry that also relies on trees for biomass/biofuel (wood chips). The potential conflict of interest with Grantham's philantropic engagement for the "beyond coal" campaign of the Sierra Club was criticized in Jeff Gibbs' documentary Planet of the Humans... Philanthropy​ Grantham, together with his wife Hannelore, established the Grantham Foundation For the Protection of the Environment in 1997. Substantial commitments have been made to Imperial College London, the London School of Economics and the University of Sheffield, to establish the Grantham Institute - Climate Change and Environment, the Grantham Research Institute on Climate Change and the Environment and the Grantham Centre for Sustainable Futures, respectively, which will enable the institutions to build on their extensive expertise in climate change research. The 2011 tax filing for the Grantham Foundation for the Protection of the Environment shows the Foundation donated $1 million to both the Sierra Club and to Nature Conservancy, and $2 million to the Environmental Defense Fund that year. The Foundation has also provided support to Greenpeace, the WWF, Rare and the Smithsonian. From 2006 to 2012, The Grantham Foundation for Protection of the Environment funded a $75,000 prize for environmental reporting. The prize was administered by the University of Rhode Island's Metcalf Institute for Marine & Environmental Reporting. In August 2019, he dedicated 98% (on average $1 billion) of his personal wealth to fight climate change. Grantham believes that investing in green technologies, is a profitable investment on the long run, claiming that decarbonizing the economy will be an investing bonanza for those who know it’s coming. Awards and Honours includes: 2009 Honorary degree, Imperial College, London https://en.wikipedia.org/wiki/Jeremy_Grantham

[hercuroc]

?

[Vermont Lt]

That’s all well and good, but future earnings projections are fake, and the value of the market is in the FANGs. It will be interesting to watch earnings start in two weeks or so.

[HonkyTonkMan]

Never heard of this “legend” and don’t give damn about his “confidence.”Apparently he predicted the tech bubble in the 90’s......along with everyone who figured out powerpoint and access databases were not a viable business plan.

[fhayek]

Forward projection of p/e on the Dow is about 24, which, by my math translates to over 4% return on your money. Contrast that with a guarantee of 0% on your “safe” investments. Even low inflation will eat you up at these rates.

[Brown Deer]

Grantham is worth paying attention to due to his prescient calls over the years.

"Mr. Grantham's study of bubbles suggests that it takes them about as long to deflate as it did to inflate.... He says the Standard & Poor's 500-stock index could fall more than an additional 20% from its current level." ~~ E.S. Browning, "A Party So Wild, the Cleanup Goes On," The Wall Street Journal, March 3, 2003.

April 2003 through July 2008 = +65%. Only one month in the following year was even negative and only a 1% loss at that.