Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

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CraigTester
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Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by CraigTester »

Jeremy is definitely not a Boglehead.

But the interviewer almost sounds like he might be....

Interesting exchange..... Do any of Jeremy's thoughts cause anyone to rethink their IPS, or does everyone on this forum just dismiss him...?

https://www.youtube.com/watch?v=JlEGU2ypr1Q
Last edited by CraigTester on Thu Jan 27, 2022 3:14 pm, edited 1 time in total.
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Re: Jeremy Grantham being asked a lot of tough questions about his super bubble call...

Post by Grt2bOutdoors »

If you see a fire, do you dismiss it? A prudent risk mitigation strategy would be to evaluate one’s susceptiblity to being affected by it, no? I didn’t watch your link but saw his interview last February right before the markets continued on their tear upwards. Each has their own asset allocation based upon their ability, need and willingness to take risk. Review your asset allocation and time horizon. There are parts of the markets that are frothy, but there are also opportunities too. If you spread your bets, own the entire markets, domestic and international you may lessen the risk. Even Grantham can not completely side step it.
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Re: Jeremy Grantham being asked a lot of tough questions about his super bubble call...

Post by freyj6 »

Grantham's takes get posted here somewhat often, usually followed by links to articles where he's saying the same thing 9 or 10 years ago.

I think the general consensus is that if you keep saying the same thing indefinitely, eventually you'll be right.
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Re: Jeremy Grantham being asked a lot of tough questions about his super bubble call...

Post by ivgrivchuck »

Even a broken clock is right twice a day.
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Re: Jeremy Grantham being asked a lot of tough questions about his super bubble call...

Post by muffins14 »

CraigTester wrote: Thu Jan 27, 2022 2:50 pm Jeremy is definitely not a Boglehead.

But the interviewer almost sounds like he might be....

Interesting exchange..... Do any of Jeremy's thoughts cause anyone to rethink their IPS, or does everyone on this forum just dismiss him...?

https://www.youtube.com/watch?v=JlEGU2ypr1Q
it's probably a waste of time to watch such things. However, if it makes you happy like a hobby, that's nice. Probably not good to make financial decisions based on a hobby though
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alfaspider
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Re: Jeremy Grantham being asked a lot of tough questions about his super bubble call...

Post by alfaspider »

Grt2bOutdoors wrote: Thu Jan 27, 2022 3:00 pm If you see a fire, do you dismiss it?
Here's the problem with that analogy:

1) You don't get to see the fire until you've already lost from it (i.e. the market has already fallen). Maybe you see the conditions you think will lead to a fire, but you don't know if it will actually happen.
2) You don't know how much the fire will spread or whether it can be easily put out. A big drop could be reversed quickly, or it could by the harbinger of a much larger one.

The key is that a big market decline from current pricing is never observable before it happens. It's only predictable. And you can find someone confidently predicting most anything.
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Re: Jeremy Grantham being asked a lot of tough questions about his super bubble call...

Post by km91 »

In fairness to Grantham, he is at least cognizant that his worldview is colored by looking for bubbles everywhere. There's clearly a great deal of hyperbole and self promotion in his calls and it's hard to take anyone calling for the next Great Depression seriously. But he does seem to position his portfolio based on how he sees the world so I appreciate the courage of his convictions, unlike some others whose public statements obviously don't align with how their portfolios are positioned *cough* Dalio *cough*
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Re: Jeremy Grantham being asked a lot of tough questions about his super bubble call...

Post by Ed 2 »

ivgrivchuck wrote: Thu Jan 27, 2022 3:07 pm Even a broken clock is right twice a day.
He’s got most broken clock right only once in 20 years
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by arcticpineapplecorp. »

Just read this speech by Michael Crichton:
"Why speculate?"

http://web.archive.org/web/200707142041 ... ulate.html
Last edited by arcticpineapplecorp. on Thu Jan 27, 2022 5:11 pm, edited 1 time in total.
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Re: Jeremy Grantham being asked a lot of tough questions about his super bubble call...

Post by Taylor Larimore »

CraigTester wrote: Thu Jan 27, 2022 2:50 pm Jeremy is definitely not a Boglehead.

But the interviewer almost sounds like he might be....

Interesting exchange..... Do any of Jeremy's thoughts cause anyone to rethink their IPS, or does everyone on this forum just dismiss him...?

https://www.youtube.com/watch?v=JlEGU2ypr1Q
Craig:

Thank you for this interesting interview. Mr Grantham was obviously cought in a terrible stock market forecast. Nevertheless, he was unwilling to admit his mistake. I found it painful to watch him try to justify his earlier forecast.

Best wishes.
Taylor
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Candor »

He is "just about nearly certain" we are in a super bubble. I guess with his record it is wise to hedge a little.

If anyone is interested he also states the traditional 60/40 portfolio is "absolutely useless".
The fool, with all his other faults, has this also - he is always getting ready to live. - Epicurus (341–270 BC)
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by andypanda »

A broken analog clock is right twice a day. He must be using a digital clock. Every digital clock I have ever owned simply went dark when it broke.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by nisiprius »

The question you need to ask is this.

"In my personal investing strategy, what use should I make of occasional, somewhat vague public comments from people famous enough to get interviews in the financial press?"

The first thing to ask is whether you have picked a single guru, or a small number of gurus, to pay attention to.

I think it is a really bad strategy pay attention to the things that catch your attention. My reason is it is almost certain that you will have selective attention. You won't really be learning anything, you will just be feeding your confirmation bias.

The second thing to ask is whether Jeremy Grantham is telling you what to do in your own portfolio. If he isn't, how do you translate his remarks into acts? For example, if you write down a rule that says "whenever Jeremy Grantham says we are in a bubble that will burst within months, I will go to cash," then you would have gone to cash last year.

As far as I'm concerned, his public remarks don't amount to investment advice. I think there are only two rational ways to treat Jeremy Grantham's remarks.

1) Take them as evidence that he shares your world view, become a GMO client, and let GMO handle your investments.

2) Treat them as noise and tune them out.

Since I'm nowhere near the minimum account size for GMO, I don't need to think very long about this.
Last edited by nisiprius on Thu Jan 27, 2022 5:03 pm, edited 1 time in total.
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Re: Jeremy Grantham being asked a lot of tough questions about his super bubble call...

Post by GP813 »

ivgrivchuck wrote: Thu Jan 27, 2022 3:07 pm Even a broken clock is right twice a day.
He's such a broken clock guy. He's been making this call for nearly a decade, it's not impressive.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by AnnetteLouisan »

I hadn’t heard him speak before. His point about seeing lower quality assets decline first was consistent with what Bessemer said recently about a fight to quality. That part didn’t sound too unreasonable.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by aristotle'sfootprint »

Suppose Grantham is right that the US market is way overpriced. What I don't understand is why it's supposed to follow that a crash will be what brings prices back to within historical ranges, rather than, say, years of low or flat returns while fundamentals catch up.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by minimalistmarc »

aristotle'sfootprint wrote: Thu Jan 27, 2022 6:19 pm Suppose Grantham is right that the US market is way overpriced. What I don't understand is why it's supposed to follow that a crash will be what brings prices back to within historical ranges, rather than, say, years of low or flat returns while fundamentals catch up.
Permabears want a crash so they can make up for their years of being badly wrong.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Elysium »

aristotle'sfootprint wrote: Thu Jan 27, 2022 6:19 pm Suppose Grantham is right that the US market is way overpriced. What I don't understand is why it's supposed to follow that a crash will be what brings prices back to within historical ranges, rather than, say, years of low or flat returns while fundamentals catch up.
We don't have patience for such things. Stocks markets often corrects violently and with force, same way on the upswing too. See March 2020, followed by the force with which market accepted the stimulus to create a wealth effect so quickly. Whether the extreme scenarios he suggested will play out or not is to be seen, such as 70% drop in S&P 500 etc, although the sentiment has shifted from last couple of years.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by marcopolo »

Candor wrote: Thu Jan 27, 2022 3:33 pm He is "just about nearly certain" we are in a super bubble. I guess with his record it is wise to hedge a little.

If anyone is interested he also states the traditional 60/40 portfolio is "absolutely useless".
What in his record would lead you to that conclusion?
Once in a while you get shown the light, in the strangest of places if you look at it right.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by mikejuss »

I'm baffled as to how this guy could afford his made-to-measure dress shirt. Do people really pay him for what amount to crystal-ball predictions? This is so silly.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by mrspock »

CraigTester wrote: Thu Jan 27, 2022 2:50 pm Jeremy is definitely not a Boglehead.

But the interviewer almost sounds like he might be....

Interesting exchange..... Do any of Jeremy's thoughts cause anyone to rethink their IPS, or does everyone on this forum just dismiss him...?

https://www.youtube.com/watch?v=JlEGU2ypr1Q
Suppose I have 2 or 3m in capital gains. What does Jeremy think I should do? Cut the government a check for $500k to $1m every time this guy as a feeling?

These fortune tellers always struck me as laughable to those who have big gains already banked. Nobody in their right mind will do that — wipe out 1/4 to 1/3 of their portfolio. Because Jeremy has a hunch? Hard pass.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Candor »

marcopolo wrote: Thu Jan 27, 2022 6:48 pm
Candor wrote: Thu Jan 27, 2022 3:33 pm He is "just about nearly certain" we are in a super bubble. I guess with his record it is wise to hedge a little.

If anyone is interested he also states the traditional 60/40 portfolio is "absolutely useless".
What in his record would lead you to that conclusion?
He states in this very interview that he was "very early" with Japan and he recommended easing up on US equities by mid 1998 which was "brutally painful" during the run-up.

He predicted the market run-up "will end up badly" in 2016.

https://www.institutionalinvestor.com/a ... y-grantham

stocks could "crack" in 2011 or 2012.

He said in January 2018 that "we are currently showing signs of entering the blow-off."

Grantham repeated his bubble warnings in June 2020 and in January 2021. Last week, he said the S&P 500 is likely to plunge almost 50%

https://markets.businessinsider.com/new ... ong-2022-1

A small sampling
The fool, with all his other faults, has this also - he is always getting ready to live. - Epicurus (341–270 BC)
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by marcopolo »

Candor wrote: Thu Jan 27, 2022 7:41 pm
marcopolo wrote: Thu Jan 27, 2022 6:48 pm
Candor wrote: Thu Jan 27, 2022 3:33 pm He is "just about nearly certain" we are in a super bubble. I guess with his record it is wise to hedge a little.

If anyone is interested he also states the traditional 60/40 portfolio is "absolutely useless".
What in his record would lead you to that conclusion?
He states in this very interview that he was "very early" with Japan and he recommended easing up on US equities by mid 1998 which was "brutally painful" during the run-up.

He predicted the market run-up "will end up badly" in 2016.

https://www.institutionalinvestor.com/a ... y-grantham

stocks could "crack" in 2011 or 2012.

He said in January 2018 that "we are currently showing signs of entering the blow-off."

Grantham repeated his bubble warnings in June 2020 and in January 2021. Last week, he said the S&P 500 is likely to plunge almost 50%

https://markets.businessinsider.com/new ... ong-2022-1

A small sampling
He pretty much always predicts painful crashes.
Sometimes crashes happen.
That does not make him good at predicting things.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Candor »

marcopolo wrote: Thu Jan 27, 2022 7:45 pm
Candor wrote: Thu Jan 27, 2022 7:41 pm
marcopolo wrote: Thu Jan 27, 2022 6:48 pm
Candor wrote: Thu Jan 27, 2022 3:33 pm He is "just about nearly certain" we are in a super bubble. I guess with his record it is wise to hedge a little.

If anyone is interested he also states the traditional 60/40 portfolio is "absolutely useless".
What in his record would lead you to that conclusion?
He states in this very interview that he was "very early" with Japan and he recommended easing up on US equities by mid 1998 which was "brutally painful" during the run-up.

He predicted the market run-up "will end up badly" in 2016.

https://www.institutionalinvestor.com/a ... y-grantham

stocks could "crack" in 2011 or 2012.

He said in January 2018 that "we are currently showing signs of entering the blow-off."

Grantham repeated his bubble warnings in June 2020 and in January 2021. Last week, he said the S&P 500 is likely to plunge almost 50%

https://markets.businessinsider.com/new ... ong-2022-1

A small sampling
He pretty much always predicts painful crashes.
Sometimes crashes happen.
That does not make him good at predicting things.
I guess we are in agreement then. Maybe I should have inserted 'poor' before 'record' in my original post to make it more clear.
The fool, with all his other faults, has this also - he is always getting ready to live. - Epicurus (341–270 BC)
marcopolo
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by marcopolo »

Candor wrote: Thu Jan 27, 2022 7:51 pm
marcopolo wrote: Thu Jan 27, 2022 7:45 pm
Candor wrote: Thu Jan 27, 2022 7:41 pm
marcopolo wrote: Thu Jan 27, 2022 6:48 pm
Candor wrote: Thu Jan 27, 2022 3:33 pm He is "just about nearly certain" we are in a super bubble. I guess with his record it is wise to hedge a little.

If anyone is interested he also states the traditional 60/40 portfolio is "absolutely useless".
What in his record would lead you to that conclusion?
He states in this very interview that he was "very early" with Japan and he recommended easing up on US equities by mid 1998 which was "brutally painful" during the run-up.

He predicted the market run-up "will end up badly" in 2016.

https://www.institutionalinvestor.com/a ... y-grantham

stocks could "crack" in 2011 or 2012.

He said in January 2018 that "we are currently showing signs of entering the blow-off."

Grantham repeated his bubble warnings in June 2020 and in January 2021. Last week, he said the S&P 500 is likely to plunge almost 50%

https://markets.businessinsider.com/new ... ong-2022-1

A small sampling
He pretty much always predicts painful crashes.
Sometimes crashes happen.
That does not make him good at predicting things.
I guess we are in agreement then. Maybe I should have inserted 'poor' before 'record' in my original post to make it more clear.
I am confused, why would you then use his record/advice to do anything, like hedge a little?
Once in a while you get shown the light, in the strangest of places if you look at it right.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Dave55 »

mikejuss wrote: Thu Jan 27, 2022 7:02 pm I'm baffled as to how this guy could afford his made-to-measure dress shirt. Do people really pay him for what amount to crystal-ball predictions? This is so silly.
His firm Grantham, Mayo, & van Otterloo has $63 billion under management. If they are charging a 1% fee that equals $63 million. That is how he can afford the shirt!

Dave
"Reality always wins, your only job is to get in touch with it." Wilfred Bion
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Dave55 »

nisiprius wrote: Thu Jan 27, 2022 5:01 pm The question you need to ask is this.

"In my personal investing strategy, what use should I make of occasional, somewhat vague public comments from people famous enough to get interviews in the financial press?"

The first thing to ask is whether you have picked a single guru, or a small number of gurus, to pay attention to.

I think it is a really bad strategy pay attention to the things that catch your attention. My reason is it is almost certain that you will have selective attention. You won't really be learning anything, you will just be feeding your confirmation bias.

The second thing to ask is whether Jeremy Grantham is telling you what to do in your own portfolio. If he isn't, how do you translate his remarks into acts? For example, if you write down a rule that says "whenever Jeremy Grantham says we are in a bubble that will burst within months, I will go to cash," then you would have gone to cash last year.

As far as I'm concerned, his public remarks don't amount to investment advice. I think there are only two rational ways to treat Jeremy Grantham's remarks.

1) Take them as evidence that he shares your world view, become a GMO client, and let GMO handle your investments.

2) Treat them as noise and tune them out.

Since I'm nowhere near the minimum account size for GMO, I don't need to think very long about this.
Thanks nisiprius, your comments are right on the mark!

Dave
"Reality always wins, your only job is to get in touch with it." Wilfred Bion
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Candor »

marcopolo wrote: Thu Jan 27, 2022 7:52 pm
Candor wrote: Thu Jan 27, 2022 7:51 pm
marcopolo wrote: Thu Jan 27, 2022 7:45 pm
Candor wrote: Thu Jan 27, 2022 7:41 pm
marcopolo wrote: Thu Jan 27, 2022 6:48 pm

What in his record would lead you to that conclusion?
He states in this very interview that he was "very early" with Japan and he recommended easing up on US equities by mid 1998 which was "brutally painful" during the run-up.

He predicted the market run-up "will end up badly" in 2016.

https://www.institutionalinvestor.com/a ... y-grantham

stocks could "crack" in 2011 or 2012.

He said in January 2018 that "we are currently showing signs of entering the blow-off."

Grantham repeated his bubble warnings in June 2020 and in January 2021. Last week, he said the S&P 500 is likely to plunge almost 50%

https://markets.businessinsider.com/new ... ong-2022-1

A small sampling
He pretty much always predicts painful crashes.
Sometimes crashes happen.
That does not make him good at predicting things.
I guess we are in agreement then. Maybe I should have inserted 'poor' before 'record' in my original post to make it more clear.
I am confused, why would you then use his record/advice to do anything, like hedge a little?
I meant he is the one hedging by stating "just about nearly certain" we are in a super bubble.
The fool, with all his other faults, has this also - he is always getting ready to live. - Epicurus (341–270 BC)
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by mikejuss »

Dave55 wrote: Thu Jan 27, 2022 7:53 pm
mikejuss wrote: Thu Jan 27, 2022 7:02 pm I'm baffled as to how this guy could afford his made-to-measure dress shirt. Do people really pay him for what amount to crystal-ball predictions? This is so silly.
His firm Grantham, Mayo, & van Otterloo has $63 billion under management. If they are charging a 1% fee that equals $63 million. That is how he can afford the shirt!

Dave
Man, get me on that gravy train--stat. :greedy
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Dave55 »

mikejuss wrote: Thu Jan 27, 2022 7:56 pm
Dave55 wrote: Thu Jan 27, 2022 7:53 pm
mikejuss wrote: Thu Jan 27, 2022 7:02 pm I'm baffled as to how this guy could afford his made-to-measure dress shirt. Do people really pay him for what amount to crystal-ball predictions? This is so silly.
His firm Grantham, Mayo, & van Otterloo has $63 billion under management. If they are charging a 1% fee that equals $63 million. That is how he can afford the shirt!

Dave
Man, get me on that gravy train--stat. :greedy
If you google his net worth, it is approximately $1 billion.

Dave
"Reality always wins, your only job is to get in touch with it." Wilfred Bion
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by mikejuss »

Dave55 wrote: Thu Jan 27, 2022 8:02 pm
mikejuss wrote: Thu Jan 27, 2022 7:56 pm
Dave55 wrote: Thu Jan 27, 2022 7:53 pm
mikejuss wrote: Thu Jan 27, 2022 7:02 pm I'm baffled as to how this guy could afford his made-to-measure dress shirt. Do people really pay him for what amount to crystal-ball predictions? This is so silly.
His firm Grantham, Mayo, & van Otterloo has $63 billion under management. If they are charging a 1% fee that equals $63 million. That is how he can afford the shirt!

Dave
Man, get me on that gravy train--stat. :greedy
If you google his net worth, it is approximately $1 billion.

Dave
And what would you chalk up that net worth to: the financial illiteracy of his clients or his own investing skills?
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by mikejuss »

Weird aside: the interviewer says he doesn't manage his own 401(k). Does this mean a financial adviser does so for him? :?
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by AnnetteLouisan »

Dave55 wrote: Thu Jan 27, 2022 8:02 pm
mikejuss wrote: Thu Jan 27, 2022 7:56 pm
Dave55 wrote: Thu Jan 27, 2022 7:53 pm
mikejuss wrote: Thu Jan 27, 2022 7:02 pm I'm baffled as to how this guy could afford his made-to-measure dress shirt. Do people really pay him for what amount to crystal-ball predictions? This is so silly.
His firm Grantham, Mayo, & van Otterloo has $63 billion under management. If they are charging a 1% fee that equals $63 million. That is how he can afford the shirt!

Dave
Man, get me on that gravy train--stat. :greedy
If you google his net worth, it is approximately $1 billion.

Dave
No wonder he wasn’t bothered by the interviewer’s tone and facial expressions. It’s advertising for him and his fund.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Dave55 »

mikejuss wrote: Thu Jan 27, 2022 8:04 pm
Dave55 wrote: Thu Jan 27, 2022 8:02 pm
mikejuss wrote: Thu Jan 27, 2022 7:56 pm
Dave55 wrote: Thu Jan 27, 2022 7:53 pm
mikejuss wrote: Thu Jan 27, 2022 7:02 pm I'm baffled as to how this guy could afford his made-to-measure dress shirt. Do people really pay him for what amount to crystal-ball predictions? This is so silly.
His firm Grantham, Mayo, & van Otterloo has $63 billion under management. If they are charging a 1% fee that equals $63 million. That is how he can afford the shirt!

Dave
Man, get me on that gravy train--stat. :greedy
If you google his net worth, it is approximately $1 billion.

Dave
And what would you chalk up that net worth to: the financial illiteracy of his clients or his own investing skills?
As to his clients financial illiteracy, I don't know them so I could not comment. I do not know how well his firm has performed for their clients, nor do I know about his investing skills.
Dave
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Stormbringer
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Stormbringer »

I have some notes I wrote down a few years ago when the S&P was at around 2400 and he was calling a bubble then. He almost had me convinced. I do not doubt that we are in for some pain, but I think he is overlooking a few important things:
  • Earning are strong.
  • The economy is not in a recession.
  • Interest rates are unlikely to skyrocket because of high government debt levels.
Also, a few years ago he was suggesting that markets might just flatten out and stay high for many years.

Maybe it is the accent, but it is easy to listen to him and he sounds like he really knows what he is talking about. But he is so often wrong, so very wrong, and always pessimistic.
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aristotle'sfootprint
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by aristotle'sfootprint »

Elysium wrote: Thu Jan 27, 2022 6:40 pm
aristotle'sfootprint wrote: Thu Jan 27, 2022 6:19 pm Suppose Grantham is right that the US market is way overpriced. What I don't understand is why it's supposed to follow that a crash will be what brings prices back to within historical ranges, rather than, say, years of low or flat returns while fundamentals catch up.
We don't have patience for such things. Stocks markets often corrects violently and with force, same way on the upswing too. See March 2020, followed by the force with which market accepted the stimulus to create a wealth effect so quickly. Whether the extreme scenarios he suggested will play out or not is to be seen, such as 70% drop in S&P 500 etc, although the sentiment has shifted from last couple of years.
Right. But such violent corrections tend to occur when there's a newsworthy event, like in March 2020, right? I don't think Grantham is claiming to be able to predict a random event. He seems to be predicting a crash merely on the basis of the fact that valuations are stretched to near historical levels. That's what I don't understand.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by abuss368 »

CraigTester wrote: Thu Jan 27, 2022 2:50 pm Jeremy is definitely not a Boglehead.

But the interviewer almost sounds like he might be....

Interesting exchange..... Do any of Jeremy's thoughts cause anyone to rethink their IPS, or does everyone on this forum just dismiss him...?

https://www.youtube.com/watch?v=JlEGU2ypr1Q
The old saying of “nobody knows nuttin” rings true here. What does he know that others don’t or is not already priced into the markets?

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Random Musings
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Random Musings »

He's has been wrong enough times that even if he is right, it doesn't make his a market guru.

But, in the spirit of his market call, I am going to buy some Super Bubble Bubble Gum now.

RM
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by AnnetteLouisan »

richard.h.gao wrote: Thu Jan 27, 2022 10:27 pm Image
Yikes. Pretty compelling chart!
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Elysium »

aristotle'sfootprint wrote: Thu Jan 27, 2022 10:07 pm
Elysium wrote: Thu Jan 27, 2022 6:40 pm
aristotle'sfootprint wrote: Thu Jan 27, 2022 6:19 pm Suppose Grantham is right that the US market is way overpriced. What I don't understand is why it's supposed to follow that a crash will be what brings prices back to within historical ranges, rather than, say, years of low or flat returns while fundamentals catch up.
We don't have patience for such things. Stocks markets often corrects violently and with force, same way on the upswing too. See March 2020, followed by the force with which market accepted the stimulus to create a wealth effect so quickly. Whether the extreme scenarios he suggested will play out or not is to be seen, such as 70% drop in S&P 500 etc, although the sentiment has shifted from last couple of years.
Right. But such violent corrections tend to occur when there's a newsworthy event, like in March 2020, right? I don't think Grantham is claiming to be able to predict a random event. He seems to be predicting a crash merely on the basis of the fact that valuations are stretched to near historical levels. That's what I don't understand.
We shouldn't pay too much attention to one voice anyway, but many voices and our own judgement on what the return expectations are to be. We can all see that common sense says reversion to the mean should occur, which means possibly expect low single digit returns for the foreseeable future. Whether that comes through a sequence of violent pull backs followed by powerful rallies, or slow and low returns for a few years, it simply doesn't matter, so long as we stay the course. I intend to stay the course no matter what, so none of this actually bothers me. It's when we plan to try and second guess and get one up over the market these things start worrying us. Otherwise we can discuss low return expectations and market crashes with a calm thinking, as if they are just natural part of investing, and the truth is they are.

As for Grantham, I noticed he is very negative on his outlook for everything, not just investments, just the whole world is doomed according to him, such as running out of resources like oil, copper, nickel, running out of food, we are destroying the planet, that human life isn't critical to the planet but bugs and other creatures are needed for the ecosystem etc. He simply do not have faith in the human race and our ability to solve our problems. Perhaps that's what happens when you get to 83 and if you were a negative thinker pretty much all your life, like someone who never dreamed of creating something or innovating something. So, there is that going on, and we got to put his market predictions in that context.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by HomerJ »

AnnetteLouisan wrote: Thu Jan 27, 2022 10:56 pm
richard.h.gao wrote: Thu Jan 27, 2022 10:27 pm Image
Yikes. Pretty compelling chart!
No, it's not compelling... It's a made up line.. Why should the market value to GDP ratio be 120%?

Especially since many companies in the U.S. stock market make money in International markets, so why should their value only be a ratio of U.S. GDP? If some U.S. company starts selling more in China or Europe it can be worth more without being compared to U.S. GDP.
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HomerJ
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by HomerJ »

Random Musings wrote: Thu Jan 27, 2022 10:17 pm He's has been wrong enough times that even if he is right, it doesn't make his a market guru.
This.

And to be honest, anyone who listens to him at this point isn't doing any research at all.

Sorry, OP... it's pretty easy to Google Grantham and force Google to look back at years past and see his dozens and dozens of failed predictions of imminent crashes that did not happen.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by willthrill81 »

And you know what's truly remarkably about all of this?

Grantham's probably got more money than everyone who's posted in this thread combined. :shock:

Somehow, he's been able to convince many people to let him manage their money for significant expense. :oops:
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by 000 »

I agree with the super bubble call and I agree we should be prepared for collapse at any time, but I disagree on the timing and the magnitude in both directions. I don't think this bubble is over and I don't think the ultimate low is SPX 2500. He's been early before.

I disagree that green energy stocks or private equity are a good investment right now. Hydrocarbons and/or nuclear will likely continue to power things for some time. He was saying the same thing last year, and oil and uranium stocks are up bigly since then. Neither were in a bubble beforehand so they are not indicative of continuation of previous mania.

I also feel the need to point out once again that past failed bearish predictions are not a bullish signal as bull markets end when they run out of buyers. So enjoy the laughs at Grantham now while you can.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by 000 »

willthrill81 wrote: Thu Jan 27, 2022 11:29 pm And you know what's truly remarkably about all of this?

Grantham's probably got more money than everyone who's posted in this thread combined. :shock:

Somehow, he's been able to convince many people to let him manage their money for significant expense. :oops:
That makes him the smart money, right?
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by tvubpwcisla »

Jeremy doesn't know anything more about will happen today, tomorrow, or next year than my neighbor down the street.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by mikejuss »

richard.h.gao wrote: Thu Jan 27, 2022 10:27 pm Image
Jeremy, is that you?
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by InvestInPasta »

Grantham predictions are completely useless, they are not actionable like CAPE.
It has been 12 years since he started predicting low and negative 7+ years returns for US equity.

If he puts his money where his mouth is, I have to reckon that he has a very strong temper, I couldn't bear the FOMO he has been experiencing for the last 12 years, I would go out of my mind.
Last edited by InvestInPasta on Sun Jan 30, 2022 8:11 pm, edited 1 time in total.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by nisiprius »

000 wrote: Fri Jan 28, 2022 12:29 am I agree with the super bubble call and I agree we should be prepared for collapse at any time, but I disagree on the timing and the magnitude in both directions. I don't think this bubble is over and I don't think the ultimate low is SPX 2500. He's been early before....
Which says nothing. "He wasn't wrong, just early" is just a way of excusing a bad prediction. A prediction without a time frame isn't a prediction. If someone crosses a street without waiting for the light and gets hit by a car, we don't say "he wasn't wrong, just early."

Observations that are basically no more than "trees don't grow to the sky" should not be acted on. Actually acting on such seeming insights has sometimes gotten this kind of result (Hussman Strategic Growth Fund; and Hussman has expressed views similar to Grantham, acting on them in full view as a pure strategy using real money):

Source

Image

The question is "what should I do when I am convinced that the market is irrational?" The wise saying, traditionally (but probably wrongly) attributed to John Maynard Keynes, is "The market can remain irrational longer than you can remain solvent."

I think the best thing to do is not to act. Just say "this is what the stock market does" and say "Yes, I'm going to participate in the crashes but at least I will also participate in the bubbles."
Last edited by nisiprius on Fri Jan 28, 2022 9:24 am, edited 1 time in total.
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