Jeremy Grantham was a famous investor, who had a record of identifying market bubbles. Grantham called stocks to double their losses. “The other day, we were down about 19.9% on the S & P 500 and about 27% on the Nasdaq. GMO co-founder Kelly Evans, a CNBC host on Wednesday said that at most we will do twice as much. If we’re unlucky (which is possible), we might do three legs similar to the 2000s. It could take several years. Grantham is an investor who has been widely followed. He was also a market historian and predicted the 2008 bear market. Also, the burst and subsequent collapse of the dot.com bubble. Grantham warned about extreme speculation in the market from the time of the crisis. Grantham explained that the bubble “superficially looks very similar to 2000” and was led by the Nasdaq reaching incredible heights. This year’s market turmoil has hit the technology sector particularly hard, with unprofitable companies and highly valued software firms. Rising rates are causing the tech-heavy Nasdaq composite to sink deeper into a bearish market, down 29% from its high. The 83-year old investor still believes there are key differences between the bubbles. Grantham explained that in 2000 the majority of the selling was focused on U.S stocks and other assets, such as commodities, housing, bonds, and real estate, held up well. We are really messing up with all the assets. Grantham explained that historically, this was very dangerous. Combining stocks with housing was very risky. It would lead to a serious recession. Grantham warned his followers at the start of 2022 that the “bubble exorzaza” was coming to an end and called for stock prices to fall by 45%.
