Legendary value investor Jeremy Grantham believes we're on the cusp of the bursting of an epic bubble.

https://www.youtube.com/watch?v=RYfmRTyl56w

Mr. Grantham believes we are "months" (not years) away from this meltdown.

When it comes to the stock market and investing, I have an incredible track record for being nearly always wrong. Be that as it may, something tells me Mr. Grantham just may be right ... One way or the other, we'll know by the end of this year - if not sooner.

Are inflation protected bonds best if you believe this?

Cathie Wood said she expected a pretty sizable correction this year as well.

That said I feel like someone has been predicting a market crash every year since 1929.

^^ every day

good interview but being 100% but he wants you to time the market

would do better than most but 10 year tips right now are about -1% real rate.

JG states still pockets of value, he specifically likes EM value stocks.

EM's been getting killed this month as I recall.

Here's An Almost Certain Sign Jeremy Grantham May Be Right ...

https://www.cnbc.com/2021/02/01/cbo-...l-by-2022.html

With all the "stimulus" and money printing that's going on, there's a higher likelihood of accelerating inflation. I remember the "stagflation" of the 1970's when we had high unemployment combined with high inflation. That combination of economic conditions killed the stock market and propelled Ronald Reagan into the White House.

In one of his first meetings with Federal Reserve Chairman Paul Volcker after he was sworn in to office, President Reagan wanted to know what Mr. Volcker and the Fed could do to reign in the inflation monster? Paraphrasing a bit, Mr. Volcker responded "Oh, I can get inflation under control, but you're going to have to accept a recession in the process." Reagan gave his consent and Mr. Volcker went to work.

The inflation monster didn't give up without a fight. The prime interest rate reached 21 percent before Mr. Volcker finally got inflation under control. I wonder if this is what Jeremy Grantham's crystal ball is seeing, (i.e. a return to high inflation followed by high interest rates - to fight the inflation - producing a tanking stock market?)

One thing's for sure ... If the Government is forecasting blue skies and "Happy Days Are Here Again" we're probably screwed.

lol true.

how does the demand for the dollar dissipate until USA loses its militarized prowess?

barring no physical war, it seems some kind of cyber warfare loss to china or something might instigate the transition of a reserve currency

until then.. :shrug:

What is EM and what would be an example of an EM value stock?

Emerging Markets
TSM

Ahh... thank you, I should have known that but got bogged down with acronyms.

TSM would seem to have fairly high growth - are you sure it's "value"? Are there any good EM value etfs?

Is TSM considered an emerging market stock?

One EM stock I've looked at is HDFC (Housing Development Finance Corp, India's largest mortgage lender). It's reporting earnings tomorrow and the stock jumped during yesterday's trading, but HDFC's done really well providing mortgages in India - the government's relaxed lending requirements (house sales tanked during lockdown) and they offer the best rates. If the recession India is in right now is a short one, they should do well.

Taiwan is an emerging market so TSM is too.

The Fed used to be "independent". Definitely does not feel like that anymore. I think rate hikes will have to wait until Biden's second (final) term. Could be some other catalyst for a crash.

Wow - for some reason I thought Taiwan was a G20 economy... thanks!

Unfortunately, it's barely an independent country officially.

you can have a situation where main street does very well with full employment and decent wage growth and the stock market does poorly ex multiple contraction, higher corporate taxes and lower margins.

Is The Stock Market About to Crash?

https://www.forbes.com/sites/jonatha...h=61045ad071de

The numbers on some of these metrics are ... concerning.

As I understand it market crashes are caused by 1. Crowd psychology ie panic and 2. A major loss of jobs causing people to take their money out of the market.

All the stimulus should keep stocks high until it doesn't. Given all the young traders on RH who are probably prone to panic as most people are... definitely see a panic sale coming. However holding too much cash is risky as well.

Jeremy Grantham and Ben Inker are great. I've been reading their quarterly letters for a decade. They are renowned for calling out the dot com bubble and housing bubble. They were a bit early each time, but when the dust settled they ended up performing pretty darn well.

This time is not working out quite the same. The value investing approach has massively underperformed the last ten years. They've been predicting negative real returns in the US stock market for eight years now and have taken a huge hit in performance and AUM. US stocks could nuke 50% tomorrow and it's unclear if you'd have been better off in their funds/strategies.



I'd listen to what he's saying, but I don't know if I'd take his advice and sell all US tech/growth stocks, buy clean energy, and buy EM value. I think he's just talking his books there.

Exactly

The world is changing, adapt or get left behind, old men. Seriously like you said what have they done in the last decade.

discount buffet XD

I'm kidding huge respect for them, I just think it's funny how these people are used to a certain type of reality, but cannot adapt to new information and clear behavorial change and risk tolerance that is completely ******ed on the average investor now.

As lons as the current political climate stays (need to keep interest low, I want to get re-elected) it will be a big ball of huge return making their dicks act like a turtle because they can't adapt.

People love predicting stagflation, but they sort of forget all the reasons why it wasn't really observed until the 70s and why people thought, in the first place, it was near impossible in major economies.

new podcast here:

https://mebfaber.com/2021/02/08/epis...hits-the-peak/