According to Bloomberg reports, renowned investor Jeremy Grantham, who is also known for his calls for market bubbles, has now made a bold statement about US equities.
US stocks about to fall: Jeremy Grantham
About a year ago, Grantham had predicted something of a historic crash in the US stock market, and now he thinks the crash may have already started. And according to the investor, even if the Fed intervened, at least nearly 50% would be seen in the collapse.
Meanwhile, comparing the current situation to previous global crises such as 1929, the dot-cum situation of 2000 and, more recently, the popular financial crisis of 2008, Grantham says US equities are also already in a “super bubble”. . He then expressed his confidence that this particular bubble would burst.
However, his reasons may not be exaggerated. On Thursday, the S&P 500 is down 45% from Wednesday’s close and another 48% from its January 4 high.
However, speaking in a Bloomberg “Front Row” interview, Grantham surprisingly admitted that he wasn’t quite sure about the bubble at the time he made his prediction last year. He said in part:
“I felt very likely, but maybe not so sure. Today, I feel it's almost right."
Interestingly, Grantham’s analysis is based on a lot of evidence. Aside from the drop in some of the most speculative stocks since February 2021, the latest indicator of a bubble in its last stage, which he felt was the breaking point, was last year’s “crazy investor behavior”.
This includes the unexpected rise of nameless cryptocurrencies and meme coins, and the millions that have been insanely spent on non-fungible tokens, or NFTs.
According to Grantham, 83,
"The checklist for a superbubble going through its phases is now complete."
And now, the renowned investor thinks it’s time for the wild crash to begin.