According to statements made by the veteran investor last week, Jeremy Grantham, co-founder of Boston-based asset management company Grantham, Mayo, & van Otterloo, (GMO), believes Standard and Poor's 500 (S&P 500), could fall another 26% in the next 12 months. Co-founder of GMO, Jeremy Grantham, stated his bearish sentiment by saying he also shorts junk bonds and the Nasdaq Composite.
GMO co-founder says 'Deterioration of Fundamentals' is shocking — 'Central Banks will be Spooked, they'll do what they can, maybe'
Jeremy Grantham, investor and co-founder of GMO, has a gloomy outlook for the stock market. He told the Reuters Global Markets Forum last Wednesday that things could get worse than the subprime mortgage mess 15 years ago. Grantham stated that this is a more dangerous time in global economics than the 2007 housing bubble madness. Grantham, who founded one of the first index funds back in the 1970s, is well-known Wall Street investor and entrepreneur.
GMO had $65 billion under management (AUM), in December 2020. Grantham has been vocal in his criticism of the economic woes of the world in recent years. Grantham had much to say about the 2007-2010 "Great Recession" in comments regarding Obama's economic policies and the housing bubble. Grantham stated that the S&P 500 stock index could fall by 26% over the next year, speaking to the Reuters Global Marketplaces Forum. During the conversation, Grantham explained that he was also betting against junk bonds and the Nasdaq Composite.
Grantham noted that superbubbles are pockets of assets with extremely high valuations. These assets were deemed to have topped by last year. Grantham noted that "the deterioration of fundamentals on an international basis looks absolutely shocking." Grantham predicted that the S&P 500 would print values of about 3,000 points in a year and could even be "decently higher" Reuters reports that Americans are suffering from high inflation and that holiday sales will be lower this year.
Global reinsurers blame inflation and the Ukraine-Russia conflict for the rise in risk protection rates. Grantham, a legendary investor, said that people forget to calculate inflationary pressures.
GMO's chief strategist for assets stated that people forget to adjust S&P for inflation. "Your assets are worth 9 percent because of inflation in last year," he said. Grantham said that this makes a marginal bearmarket a very serious bear market. Grantham is joining Michael Burry and other Wall Street gurus in believing that a stock market crash will soon occur.
What do you think Grantham's prediction for the S&P 500? Comment below to let us know your thoughts on this topic.
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By: Jamie Redman
Title: ‘A Dangerous Looking Moment in Global Economics’ — Veteran Investor Jeremy Grantham Warns S&P 500 Could Plunge Another 26%
Sourced From: news.bitcoin.com/a-dangerous-looking-moment-in-global-economics-veteran-investor-jeremy-grantham-warns-sp-500-could-plunge-another-26/
Published Date: Mon, 12 Sep 2022 21:30:28 +0000
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