Bitcoin Forum

Jeremy Grantham, the long-term investment strategist of GMO and a renowned stock-market skeptic, says that the “epic” stock bubble of today could deflate as early as the late spring.

“My best guess as to the longest this bubble might survive is the late spring or early summer, coinciding with the broad rollout of the COVID vaccine,” Grantham wrote in a note to investors titled “Waiting for the Last Dance.” “At that moment, the most pressing issue facing the world economy will have been solved. Market participants will breathe a sigh of relief, look around, and immediately realize that the economy is still in poor shape, stimulus will shortly be cut back with the end of the COVID crisis, and valuations are absurd. ‘Buy the rumor, sell the news.’”

Last year, GMO, which Grantham founded, dramatically reduced its exposure to stocks, cutting net equity exposure in its Benchmark-Free Allocation Strategy to 25% from 55%. Today, target equity exposure for the strategy is 29%.

Grantham has been early to call other bear markets: GMO got out of Japan in 1987, two years before it peaked in 1989. For years, he has called the current market overvalued as it marched higher.

That has turned out to be premature. The S&P 500 closed up 16.3% for 2020, gaining just shy of 50% over the past two years, its largest two-year gain since 1999. The Dow Jones Industrial Average added 2068 points, or 7.3%, in 2020, while the Nasdaq Composite roared 43.6% higher last year. The small-cap Russell 2000 gained 18.4%.

Grantham is credited with predicting the 2000 and 2008 downturns and, more recently, has become known for speaking out about the perils of the changing climate and what it means for life on earth.

He argues that today’s bull market, born in 2009, “has finally matured into a fully-fledged epic bubble” that can be considered one of the great bubbles of financial history, akin to the South Sea bubble and those of 1929 and 2000. “These great bubbles are where fortunes are made and lost—and where investors truly prove their mettle,” he writes.

“The single most dependable feature of the late stages of the great bubbles of history has been really crazy investor behavior, especially on the part of individuals,” writes Grantham. Even though he owns a Tesla Model 3, Grantham’s personal favorite example of reckless behavior is the market value of Tesla (TSLA), which, at “now over $600 billion, amounts to over $1.25 million per car sold each year versus $9,000 per car for GM. What has 1929 got to equal that?”

Other examples of excess: The volume of small retail stock purchases; 248 special purpose acquisition company, or SPAC, listings; and the market’s vertiginous advance from its March lows. Meanwhile, the combination of a price/earnings ratio near the top of its historical range and an economy near the bottom “is completely without precedent, and may even be a better measure of speculative intensity than any SPAC,” Grantham writes.

https://www.barrons.com/articles/jeremy-grantham-says-stock-market-bubble-could-deflate-in-the-spring-51609932601

Lockdowns coupled with free money airdrops could represent the classic meme of the snake devouring its own tail. As an analogy for states attempting to tax and spend their way out of debt.

With or without covid, a crash would come, the stock market looks like just as much of a bubble as crypto right now. Tesla doubled in a month = Bitcoin doubled in a month. I just read an /r/wallstreetbets thread today, and people were discussing how their normie friends who don't know what a bull market is are making thousands of dollars just by buying popular stocks.

With or without covid, a crash would come, the stock market looks like just as much of a bubble as crypto right now. Tesla doubled in a month = Bitcoin doubled in a month. I just read an /r/wallstreetbets thread today, and people were discussing how their normie friends who don't know what a bull market is are making thousands of dollars just by buying popular stocks.

I thin it's unclear how this crash would affect Bitcoin. We have seen Bitcoin and stocks going hand-in-hand in the past for some time, it could happen that stock market panic would touch all other markets, including crypto. And then money printer will go even more brrr to help companies, which would boost Bitcoin. This scenario has already happened with the initial covid market panic.

The vaccine won't work against the new mutant strain of corona which recently emerged in the UK and new york.

A new study provides early evidence that a Covid-19 vaccine might be effective against two new coronavirus strains first identified in South Africa and the UK, despite a concerning mutation. That's because of "the possibility that a future mutation ... might necessitate a vaccine strain change." Both Pfizer's and Moderna's vaccines use genetic technology that would allow the vaccines to be quickly adapted to account for mutations, they noted.

Doom and gloom prediction could pan out IMO. The vaccine won't work against the new mutant strain of corona which recently emerged in the UK and new york.

Doom and gloom prediction could pan out IMO. The vaccine won't work against the new mutant strain of corona which recently emerged in the UK and new york. Lockdowns will continue to have devastating effects on global job markets and economies. Inflation in the US may be relatively contained within the banking sector but that could change with new stimulus bills being drafted.

Climbing the wall of worry is a reference to investor behavior during bull markets, at the end of major bear periods, or general periods of market gains.

The phrase refers to the market's ability to show resilience in the face of economic or corporate news that might otherwise spark a selloff, and instead keep pushing securities higher.

The wall of worry is sometimes one event the market must keep climbing in spite of but is more often a confluence of events the market must look beyond.

The fed is been responsible for the majority of uptrending US stock movement since 2008. But their control has limitations.

In this case crypto market will be dumped in spring too. We still connected to traditionl market

the biggest problem i see could happen when all those people who have paid a lot of money to be vaccinated with these untested vaccines let their guard down and then get infected with the virus again and we see another peak in the pandemic which would kick start the depression and the economical devastation as the medical companies responsible would go bankrupt in the subsequent lawsuits and won't be able to actually work on a proper vaccine that works.

the biggest problem i see could happen when all those people who have paid a lot of money to be vaccinated with these untested vaccines let their guard down and then get infected with the virus again and we see another peak in the pandemic which would kick start the depression and the economical devastation as the medical companies responsible would go bankrupt in the subsequent lawsuits and won't be able to actually work on a proper vaccine that works.

You should substantiate your claim that the vaccine won’t work against the new strains of the virus because it seems critical to your assessment that this guy I’ve never heard of is right about a collapse, and more importantly all evidence I’ve seen reported so far are that the current vaccines are effective against the new Uk strain of the virus.