- Jeremy Grantham diagnosed an epic market bubble and predicted a devastating crash.
- The GMO cofounder called out reckless speculation on meme stocks and cryptocurrencies.
Jeremy Grantham, in a raft of outlooks and interviews between the spring of 2020 and the end of 2022, repeatedly warned investors they were caught in a historic bubble and careening towards a devastating crash.
The GMO cofounder and market historian is best known for calling the last three market bubbles. He highlighted several signs of impending doom, including investor euphoria, excessive valuations, and rampant speculation on risky assets such as meme stocks and cryptocurrencies.
Here are Grantham's 12 best quotes since the pandemic began, lightly edited and condensed for clarity:
1. "My confidence is rising quite rapidly that this is, in fact, becoming the fourth 'real McCoy' bubble of my investment career." ($4)
2. "The market can go up on bad news and go up on good news — those are characteristics of a bubble. There's nothing much you can throw at it when it gets going." ($4)
3. "I've never had any illusions about my ability to time the bubble breaking. I have a very low definition of success; it's that sooner or later the market will be lower than the point at which I suggested you should get out." ($4)
4. "Make no mistake — for the majority of investors today, this could very well be the most important event of your investing lives. Here we are again, waiting for the last dance and, eventually, for the $4." ($4)
5. "When you have reached this level of obvious super-enthusiasm, the bubble has always, without exception, broken in the next few months, not a few years." ($4)
6. "I sympathize completely with these people out there enjoying this bubble, but they've always ended very badly, and I have no doubt this one will too." ($4)
7. "We will have to live, potentially, with the biggest loss of perceived value from assets that we have ever seen." ($4)
8. "People are having fun, and they'll lose everything in the end. And I'm sorry for them because I'm sure they can't afford to lose everything." ($4)
9. "Bubbles are unbelievably easy to see; it's knowing when the bust will come that is trickier. You see it when the markets are on the front pages instead of the financial pages, when the news is full of stories of people getting cheated, when new coins are being created every month." ($4)
10. "This bubble is the real thing, and everyone can see it. It's as obvious as the nose on your face." ($4)
11. "You knew last year this bubble was going to be the real McCoy, but you didn't know if it was going to break the next Wednesday, or a year later. One by one, we've checked off every condition that a glorious bubble needs in terms of crazy behavior. This has been crazier by a substantial margin than 1929 and 2000." ($4)
12. "There's a bigger buy-in this time to the idea that prices never decline, and that all you have do is buy, than there has ever been. When the decline comes, it will perhaps be bigger and better than anything previously in US history." ($4)
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