Jeremy Grantham, veteran investor, warns stock market bubble may burst soon

Veteran investor Jeremy Grantham flags concerns of bubble

Grantham, the co-founder of Boston-based GMO, has years of experience navigating the markets. The 82-year-old retired from portfolio management but has continued to share his views on markets. He is credited with predicting the 2000 and 2008 downturns. He said this could be a major bubble event usually seen “every several decades”, and compares it to the South Sea bubble and those of 1929 and 2000. Of late, he has been advocating about the perils of climate change.

Since March 9, 2009, — the day stock markets tumbled to their lowest level with the Dow and S&P 500 ending at 12-year lows — the S&P 500 has zoomed over 450 percent.

In the note, Grantham also said that he “came fairly close to calling one bull market peak in 2008 and nailed a bear market low in early 2009”. When it comes to predictions, he says in his 50-year career, he has been far luckier than he could have hoped for.

From the point of view of investors, he says this could very well be the most important event in their lives. Though fortunes could be made or lost in such bubbles, he feels it’s a privilege to be a part of such markets, as they are “exciting and terrifying at the same time”.

Grantham was also early to call other bear markets: GMO got out of Japan in 1987, two years before it peaked in 1989.