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Jeremy Grantham with David Rubenstein / September 2023

edited September 6 in Other Investing
24-minute interview. Not that great as financial discussions go - IMHO. Grantham’s emphasis is more on climate change and social / political upheaval, both of which he views as grave threats to mankind. The one investment takeaway I got was that he finds value in most international equity markets, while seeing the U.S. market as a huge bubble.

Linked solely for those who might be interested in Grantham’s latest views.

Here’s the interview:

I’d describe Grantham’s read on U.S. equities as “The elephant chasing his tail” argument. Most of what I read elsewhere seems to confirm my suspicion that investors tend to chase what is recently successful - thereby propelling certain assets even higher and pulling in more investors, of course, until the asset(s) eventually tumble under their own weight. More a problem with different corners of the equity market - but I believe it can apply to funds as well, depending on their degree of concentration. ISTM perhaps a certain niche fund’s strategy will remain highly successful for a long while, but than whither on the vine just as its AUM / popularity soar. CCOR may be a candidate here - though I personally believe that one has finally turned the corner.

The Psychology of Money by Morgan Housel is worth a quick read. It was featured in a recent Barron’s interview with the author. Not as good as the Barron’s promo / hype might lead you to believe, but still worth the hour or so reading time. A lot of common sense ideas aimed at the smaller every-day investor / saver. (He’s mostly talked me out of splurging on an extravagant new 2023 auto when my 2018 model is running perfectly fine.:))


  • I watched and enjoyed it. A wise old man. He even referred to his sort of job, managing money and being a professional investor as "trivial." Well, OK, compared to Climate Change. I certainly understands what he means, there. Thanks for posting that!
  • Why does Jeremy Grantham continue to get press? He has been consistently wrong for years, if not decades. He has been predicting underperformance by US stocks for years, while promoting foreign stocks and emerging markets. And he has been wrong, year after year. Sooner or later his predictions will come true, just like a broken clock is correct twice a day. When that day comes, so what? Anyone who has followed his advice has already lost lots and lots of money.
  • edited September 8
    See my original comment :Linked solely for those who might be interested in Grantham’s latest views.”

    If the shoe doesn’t fit, don’t wear it.

    Don’t tell me there’s some restriction here against posting out-of-favor / unpopular / or recently unprofitable investment opinion?

    Bloomberg? They are what they are. Lots to criticize there.

    BTW - Did you notice the 18% drop in the S&P last year? I think we’re in agreement that that was only a minor speed-bump in the overall scheme of things. But to many here it was earth-shaking. Surely you’ve noticed the fervent interest now in T-Bills / CDs and a loss of appetite for equities? I’d guess 2 out of 3 investment posts now are on the subject of cash or cash equivalents. In a sense, these investors are singing Grantham’s song.

    Grantham’s bearish equity call (huge U.S. bubble) may be completely bass-ackwards … And yet you posted a month ago (August 2): “I’ve been loading up on CDs and treasuries, with ladders extending out five years in my IRAs and three years in taxable savings. I don’t care if interest rates rise further as I’m happy to be earning better than 5% on all these cash investments.”
  • Hank,

    I’m open to opposing views, but journalists promoting those views should also do a little fact checking of the track record of so-called experts. My investments in CDs are irrelevant because they comprise a small percentage of my overall asset allocation. I never said I was going to all cash or suggesting that others do so. My CDs also are being used as alternative to bonds, not stocks.

    I have followed Grantham’s view for years because the financial press is enthralled by prophets of doom (Hussman is another example). He has been forecasting poor returns for US stocks for at least a decade, while recommending emerging markets and foreign stocks as better alternatives. He has been wrong, year after year. I know this because I am one of the poor fools who followed his bad advice and bought emerging markets funds that have been lousy investments, even after owning them for many, many years.

    I will give Grantham credit for making convincing arguments for his forecasts, even though he’s been wrong. And I fully support his concerns about climate change and the environment.
  • edited September 8

    Thanks. All good.

    Yes - it was clear you were referring only to your cash position in the August comments. A bit unfair of me to single out one line.

    I won’t “lock-in” on any so-called prophet. But like to listen to a wide variety. ISTM Grantham received an outsized amount of attention on this board during the final months of 2021. And to that extent, he helped me, and perhaps others, side-step some of the carnage of ‘22. As he hasn’t been mentioned much recently, I decided to post the interview. Grantham was correct on Japan in late ‘21. Felt they were a good bet. I haven’t followed it lately, but it was a very hot market the first half of this year - perhaps the best of any developed economy.

    I have pummeled .John Hussman with criticism over the years. And might react to a post featuring him the same way you did to the Grantham post.

    The bottom line here is: I think David Rubenstein is one of the better on-air interviewers today. (Others are free to disagree.) So I’d listen to any interview of his with someone of prominence - be it Grantham, Hussman, Biden or Trump. In other words, it wouldn’t matter whether I strongly agreed or disagreed with the subject of the interview - because I think Rubenstein is that good.

  • @Hank. Big +1 for your comments on the Morgan Housel book. Lots of common sense and well worth the time.
  • edited September 8
    Grantham has been wrong for over 10 years, but, as usual, scary stories sell a lot more.
    Who is going to read an interview with someone who says: I don't know what stocks will do in the next 3-6-12 months because nobody does, and BTW, the SP500 was up over 80% since 1980?
    Sure, if someone has been a bear on US stocks since 2010, he will be right sometimes but he missed an unbelievable performance.
    Since I have a special place for Grantham, I kept several of his past great calls.
    2010 (link)
    "Over the next seven years, GMO forecasts large-cap U.S. stocks to deliver a real return (after inflation) of 1.3% annually, while small-caps provide a 0.5% return."
    "International stocks also fare reasonably well in GMO's model, up about 4.7%, while emerging markets come in with a 3.9% annualized gain."
    FD: reality(link): SPY made 14.4%...IWM 11.9%...EEM 3%. One of the worse misses in the history of predictions.
    10/2012 (link) Jeremy Grantham Warns 2013 Will Be A Dangerous Year For Stocks:

    FD: The SP500 made over 32%


    2015 (link) GMO's Jeremy Grantham has a relatively gloomy outlook for the markets and economy.

    FD: Wrong again and again and again. Why does anybody ask his opinion?
  • edited September 9
    I consume a lot of financial media.
    Frankly, this is often an inefficient use of my time.
    Good books written by talented authors are frequently more informative and rewarding.
    I just finished reading the recently released second edition of The Four Pillars of Investing
    by William Bernstein. There is a short chapter in the book about "financial journalism."
    Select quotes from the author are below.

    "Is any financial journalism worth reading? Almost none."
    Noted exceptions listed: Jason Zweig (WSJ), Jeff Sommer (NYT), Tara Siegel-Bernard (NYT),
    and Ron Lieber (NYT).
    "But on the whole, investors are better off ignoring not only both these publications,
    but nearly all financial print media."

    "Among general audience publications, only one consistently conveys a nuanced, cutting-edge
    approach to finance and that's the Economist."

    "The Financial Times is also sometimes worth reading, but its digital library availability is embargoed for a month, and accessing the current issue, at several hundred dollars per year, is not cost efficient for many."

    "YouTube also contains a treasure trove of lectures by nearly all of finance's leading lights,
    strewn throughout its vast wasteland of misinfomation."

    Search for: John Bogle, Kenneth French, Zvi Bodie, Eugene Fama, Jason Zweig, Burton Malkiel, William Sharpe, Jonathan Clements, and Charles Ellis.

    Useful internet sites: - discussion board and wiki pages

    Worthwhile finance podcasts:
    Economist's Money Talks
    NPR's Planet Money
    Rick Ferri's Boglehead
    Barry Ritholtz's Masters in Business
  • edited September 9
    larryB said:

    @Hank. Big +1 for your comments on the Morgan Housel book. Lots of common sense and well worth the time.

    I agree. The Psychology of Money is a good book!

  • edited September 9
    Well … In looking back over 2 years of Grantham threads on MFO it does appear he is largely held in disrepute by this esteemed body. I’d somehow missed that. Feeling the consensus view is generally correct in investing, I will foreswear to never again post Grantham. Should I further entertain his thoughts it will be only as a “closeted” follower.

    That aside, thanks for all the comments & recommendations on what better to read and who better to listen to on investing. Glad some found Housel’s book of value.
  • edited September 9
    Jeremy Grantham became famous for predicting the dot-com crash in 2000 and the financial crisis in 2008.
    Grantham did not anticipate the superior returns for large U.S. stocks (particulary growth stocks)
    since the financial crisis because he believed many of these stocks were overvalued.
    Long-term market trends changed but Grantham's views did not evolve accordingly.
    Having said that, most prognosticators' predictions are incorrect.
    I think it's beneficial to listen to different viewpoints albeit without making large bets on specific outcomes.

    BTW, thanks for mentioning Bloomberg Wealth.
    I'm a fan of The David Rubenstein Show but didn't realize Mr. Rubenstein also hosted Bloomberg Wealth.
  • The only surviving bears now are billionaire-bears and firm owners/founders. Most other bears with jobs have thrown in the towel.

    Unfortunately, this means that shorts have been mauled too. So, this mostly-long market is now subject to sudden up-spikes or big-downswings as there will be no stabilizing effects from the short-sellers.
  • I place little confidence in market predictions. However, if someone is always bearish, their predictions serve no value at all. Likewise, if they’re always bearish, how can someone claim that they correctly predicted the bear markets of 2000, 1988, 2022, etc?
  • Andrew Foster and his team have posted extensive views on emerging market investing and it is not trivial matter in order to get meaningful gain. The investment landscape is changing fast and some countries are rapidly becoming “uninvestable”.
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