- Jeremy Grantham labeled a “superbubble” in asset prices and warned of an epic market crash last year.
- The GMO co-founder and market historian also weighed in on bitcoin and predicted a global housing recession.
- Here are the 8 best Grantham quotes for 2022.
Legendary investor Jeremy Grantham rocked Wall Street last year by sounding the alarm about a “superbubble” in asset prices and predicting it would end in an epic market crash.
The market historian and GMO co-founder also slammed bitcoin, warned of a global slump in house prices and urged investors not to be fooled by short-lived rallies.
Here are Grantham’s 8 best quotes of 2022, slightly edited for length and clarity:
1. “Most of the superbubbles fall below the trend and stay there for quite some time. This time, the trend is at most 2,500. It will be difficult to prevent the market from falling to this level.” (January 26) (Grantham’s S&P 500 forecast suggests the benchmark could fall another 34% from its current level of around 3,800.)
2. “We have a market today that looks superficially like 2000 and I think it will initially become like 2000. Then the deflationary effects on the economy and the stock market will lead to a world rather like the 1970s where all assets they’re just much lower prices than they are today.” (May 9)
3. “We really mess with all the assets, and that has proven, historically, to be very risky.” (May 18) (Grantham pointed to rising prices in stocks, bonds, housing, energy, metals and food.)
4. “There is nothing as quick and spectacular as a bear market rally. In hindsight they mean very little, but the moment they scare the pants off the bears and give hope that it’s all over, all is forgotten and it’s back to the races .” (July 29)
5. “Bitcoin is not a good store of value, as we’ve seen. It’s terrible for a currency exchange. It’s expensive to trade, but worst of all, it’s deadly to the environment. It’s incredibly energy-intensive to give you a profitable instrument for bet, that’s it. The fact that it’s taking our precious energy and having a carbon footprint is the worst crime of all, and the sooner it’s gone, the better.” (July 29)
6. “Every cycle is different and unique — but every historical parallel suggests the worst is yet to come.” (August 31)
7. “I think housing markets around the world are going to spend the next big chunk of time unraveling and causing all kinds of, maybe, unexpected problems.” (September 1)
8. “This is a more dangerous time in the global economy than even the housing bubble madness of 2007. The deterioration of fundamentals on a global basis looks absolutely shocking.” (September 8)
Read more: The world’s leading investment firms pay Rob Arnott for advice. He shares 2 trades he thinks will deliver 15% annual returns over the next decade — and breaks down why there’s a “good chance” the market will see new lows.