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GMO: Let the Wild Rumpus Begin - Superbubble

Pretty dire predictions even by Grantham's usually bearish standards:


  • If he says it enough times (and he has) one of these days he is bound to be right. Personally, I'm glad I didn't listen to him seven or ten years ago.
  • edited January 21
    The Five Stages of a Market Bubble

    “There are typically five stages to a bubble: displacement, boom, euphoria, profit-taking, and panic.”
  • My thinking is even if you disagree with an analyst's viewpoint, you should read it to challenge your preconceived notions and see whether your own analysis still holds up. Grantham may be wrong, but I think it's important for investors to understand for themselves why they think he's wrong. His arguments are cogent ones, but worth challenging. For instance, I no longer think he's right about the Fed being oblivious to financial risks, but am more cynical about the Fed seeing its role as being to prop up Wall Street despite knowing about the risks. The so-called--Fed put.
  • edited January 21
    I attempt to consider all views, even the extreme ones like Grantham’s. Likely there’s elements of truth in there that we can draw from. Don’t have to agree with all. If nothing else, he’s spot-on about recent investor psychology.

    I side with what is known as “The Fed Put” thesis. But, assuming I’m correct, it’s not without other perilous ramifications.
  • Grantham is a good writer and has a better track record than Huss but yea he's been wrong for a long time now too.
  • To your point, Mr. Grantham is very knowledgeable and articulate.
    However, his market prognostications have been wrong for many years now.
    I don't make investment decisions based on statements from "experts" or "market gurus."
  • edited January 22
    I do not mind somebody being wrong as long as they had the courage of conviction. We already discussed in an earlier thread how he had not invested in line with his previous projections / pronouncements. I can look else where for entertainment than read / listen him. Gimmickry works best in Finance because the audience is always caught between greed and fear. Financial fraud has never evolved because it does not have to. The tricks in Finance are as old as money.
  • Comparing GBMFX with VTI since 2013 shows that 10K invested in VTI would now be worth over $40K and GBMFX just under $14K. A CD would have been a better choice. There is an opportunity cost to sitting out of a strong market even considering the inevitable corrections that will happen along the way. In the end, as has been said, you are what your record says you are. GMO stinks, and that will be true even if they guess right this time, finally.
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