- Jeremy Grantham, the legendary investor who predicted the last three market bubbles, is forecasting that the S&P 500 will crash nearly 50% after the “superbubble” bursts in the US.
- The 83-year-old methodically laid out his reasons for being so confident that the latest “superbubble” will burst — just like its predecessors did in 1929, 2000, and 2008.
- Grantham notes that he is “increasingly feeling like the boy watching the naked emperor passing in procession” about cryptocurrency’s “touchy-feely characteristic.”
Isabelle Lee from Insider writes:
“Jeremy Grantham, the legendary investor who has predicted the last three market bubbles, foresees the S&P 500 crashing almost 50% after the fourth “superbubble” the US has ever seen bursts — even with multiple efforts underway to prevent it.
The market historian, who has repeatedly warned investors they’re caught in a historic bubble, said the benchmark index may slip to around 2,500 — a downside of roughly 44% from Thursday’s close and 48% from January’s peak. The tech-heavy Nasdaq Composite, meanwhile, might see a sharper downturn, he added.
“This time last year it looked like we might have a standard bubble with resulting standard pain for the economy,” Grantham said in a note published Thursday on the website of his Boston-based asset management firm, GMO. “But during the year, the bubble advanced to the category of superbubble, one of only three in modern times in US equities, and the potential pain has increased accordingly.”
What made the bubble worse, according to the investor, is how it’s been accompanied by extremely low interest rates and high bond prices as well as a bubble in housing and an “incipient bubble” in commodities…”
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