‘
‘We have a few weeks of extra money and a few weeks to put your last, desperate chips into play, and then an even more spectacular bust … If you have reached this level of clear super-enthusiasm, the bubble has always, without exception, been broken in the next few months, not a few years.
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This is the latest from Jeremy Grantham, co-founder and chief investment officer of Boston-based money manager Grantham, Mayo, Van Otterloo & Co. the last century.
In an interview with Bloomberg TV’s “Front Row”, the in-depth investor, who has been regularly acknowledged with several current market calls for the past two decades, insists that a steady rise in shares, promoted by free money from the Federal Reserve and the fiscal government of the government. stimulus, can not proceed without consequences.
“If you think you live in a world where production does not matter and you can only create paper, sooner or later you will do the impossible, and that is inflation,” Grantham warned.
This is far from the first warning Grantham has issued in recent weeks, but he now points to the $ 1.9 billion coronavirus relief package proposed by newly inaugurated US President Joe Biden as a further reason for an eventual burst from the bubble.
Grantham is worth noting because of his preliminary calls over the years. He said shares were overvalued in 2000 and again in 2007, with the prospect of a downturn in the market, reports The Wall Street Journal. Grantham also indicated that elements of the financial market were detached from reality until the 2008-09 financial crisis.
However, GMO has left the S&P 500 index SPX behind,
in 2020, according to a report by Bloomberg News Tuesday.
In June, one of GMO’s top investment officials, Ben Inker, told investors it was time to sell shares, in a client letter quoted by Bloomberg. Inker suggested to Bloomberg that investing is not an easy game.
U.S. stocks, meanwhile, have defied Grantham’s clumsy forecasts and gravity. The Nasdaq Composite Index COMP,
the Dow Jones Industrial Average DJIA,
and the S&P 500 index all trades near historic peaks.