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J. Grantham warns another yr bear market

edited March 2023 in Other Investing
https://markets.businessinsider.com/news/stocks/jeremy-grantham-stock-market-bubble-fed-horror-show-interest-rates-2023-3

Business News

Veteran investor Jeremy Grantham says the stock bubble is still deflating and the market will go down in 2024 amid a ‘horror show’ from the Fed.
by Alma Winkle March 10, 2023
Veteran investor Jeremy Grantham says the stock bubble is still deflating and the market will go down in 2024 amid a ‘horror show’ from the Fed.

Jeremy Grantham said that the stock bubble is still in the process of deflating and the market will not bottom out until 2024.
The veteran investor blasted the Fed’s monetary policy as a 36-year-long “horror show.”
He predicted mild pain for investors in the coming year, while warning of a downturn in equities around April.
The stock market bubble is still in the process of deflating, according to veteran investor Jeremy Grantham, and equities will finally bottom out in late 2024 amid the Federal Reserve’s “horror show” of monetary policy.

In a recent interview on Bloomberg’s What Goes Up podcast, the GMO co-founder reiterated his view that stocks were in a speculative bubble and about to pop, thanks to the end of ultra-low interest rates and ample liquidity in the market. Thanks for those who brought the stock. For circling high during the pandemic.

Grantham also blasted the Fed’s monetary policy in the years since former Alan Greenspan took over as central bank chairman in 1987, calling its effects on the US economy a 36-year-long “horror show”, which has recently Helped build immense wealth over the years. ,



No end in sights until 2024, maybe 17% more downturn



so much pain ahead...

Comments

  • This article probably deserves more attention and shouldn't be "off-topic" as it is definitely related to investing.
  • ...But Grantham predicting doom and disaster? THERE'S an effing surprise!
    giggle.
  • edited March 2023
    ”stocks were in a speculative bubble and about to pop”

    Statements like that tell you nothing. Which stocks? Where on the planet? A lot of time the general term “stocks” is applied to the U.S. S&P 500 Index. I’d have no problem believing Grantham (or at least giving the statement some credence) if that’s what he’s referencing.

    “Pop” Great financial term.:)
  • I think in Grantham's case, given the models he uses, it's safe to assume he is referring to U.S. large caps, i.e., something akin to the S&P 500 or Russell 1000.
  • edited March 2023
    @Crash: Yeah, really!

    Relatedly --- hey look, it's 1230PM ... again!
  • I think in Grantham's case, given the models he uses, it's safe to assume he is referring to U.S. large caps, i.e., something akin to the S&P 500 or Russell 1000.

    And pity those with such a narrow view of investing. Unless you’re 25 and DCA’ng into a 401K every couple weeks. Over the next 35 years an S&P index fund should do just fine.

  • edited March 2023
    Actually, Grantham's models generally include other kinds of stocks besides the S&P 500 and other asset classes in general, although he doesn't always talk about them in more macro interviews. So, I wouldn't call his view of investing narrow.

    That said, I'm not sure how anyone can say with absolute confidence that "over the next 35 years an S&P index fund should do just fine." That assumes market, economic and political history just repeats. I wonder if someone asked you, "Do you think over the next 35 years the U.S. will remain the dominant global economic superpower?" if your answer would be as confident. And the two questions regarding future market performance and national performance are connected.
  • edited March 2023
    Thanks @LewisBraham - Didn’t intend to sound critical of anyone. I read Grantham quite a bit 12-18 months ago and learned a great deal from him. Helped prepare me for the onslaught later on in mid ‘22. It’s just that watching all the different global & domestic assets move around today highlights the value of a broad perspective.

    To your later remark - I actually considered attaching a proviso to the S&P remark along the lines of what you mention. Will we be a democracy in 35 years? Will workers still have the means to invest in the S&P or anything else? Will the atmosphere be fit to breath?
  • edited March 2023
    I think the hardest thing prognosticators have to do is both deeply understand the past while simultaneously understanding what is different from the past today. And then, we, poor souls, have to figure out which prognosticator is worth trusting.
  • Yogi Berra is still my go to guy here !
  • sma3 said:

    Yogi Berra is still my go to guy here !

    It's never over, 'til it's over. And always remember: 90% of the game is half-mental. And the other half is physical.
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