Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

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Wanderingwheelz
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Wanderingwheelz »

willthrill81 wrote: Sun Jul 24, 2022 7:50 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 7:44 pm
willthrill81 wrote: Sun Jul 24, 2022 7:37 pm
CC1E wrote: Sun Jul 24, 2022 6:28 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 4:19 pm I’m smart enough to know corporate earnings have a strong correlation to stock market performance, and my business is absolutely crushing it these days. By the way, this is a business that typically thrives when consumers are very confident since it’s 100% discretionary and also in a resort town where people need to be confident to have even shown up in the first place.

Maybe there’s a giant downturn right on the horizon. Maybe.. but it sure isn’t here right now.
People still have jobs and are spending, which is keeping inflation high, along with supply shortages. But the FED says they want inflation down, so they’ll keep turning the screws until people stop spending (they can’t fix the supply issues). Assuming the FED doesn’t chicken out, it’s only a matter of time until they get what they want.
Either inflation stays high and continues to quickly erode everyone's buying power or the Fed continues to increase interest rates until the economy finally cries 'uncle' and inflation comes down. Heads, I win, tails, you lose. Inflation magically falling on its own is a pipe dream that far too many here have indulged in.
Why are you so dismissive of the supply side?
I'm not dismissive of it, but it seems to be more like the lighter that started a blaze. Turning off the lighter doesn't put out the blaze because it's self-sustaining. Consumers are likely now expecting high inflation, which turns into a self-fulfilling prophecy. This is so widely known that it's a cross-disciplinary sub-field of study referred to as inflationary psychology. Earlier this month, the WSJ had an article discussing why the Fed is fearful of inflationary psychology.
I get what you’re saying, but once the blaze is set weather can have a big effect on the fire. I think of a big rain of discounted goods at Target and REI if you’re trying to find a reason why the fire can be brought under control. Hopefully for good. I even saw the crab cakes we buy at the market drop in price this week. I had to rub my eyes since falling food prices are, umm.. not something any of us are used to. Maybe there’s less meat in them. I’ll have to see.
Being wrong compounds forever.
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willthrill81
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by willthrill81 »

Wanderingwheelz wrote: Sun Jul 24, 2022 7:54 pm
willthrill81 wrote: Sun Jul 24, 2022 7:50 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 7:44 pm
willthrill81 wrote: Sun Jul 24, 2022 7:37 pm
CC1E wrote: Sun Jul 24, 2022 6:28 pm

People still have jobs and are spending, which is keeping inflation high, along with supply shortages. But the FED says they want inflation down, so they’ll keep turning the screws until people stop spending (they can’t fix the supply issues). Assuming the FED doesn’t chicken out, it’s only a matter of time until they get what they want.
Either inflation stays high and continues to quickly erode everyone's buying power or the Fed continues to increase interest rates until the economy finally cries 'uncle' and inflation comes down. Heads, I win, tails, you lose. Inflation magically falling on its own is a pipe dream that far too many here have indulged in.
Why are you so dismissive of the supply side?
I'm not dismissive of it, but it seems to be more like the lighter that started a blaze. Turning off the lighter doesn't put out the blaze because it's self-sustaining. Consumers are likely now expecting high inflation, which turns into a self-fulfilling prophecy. This is so widely known that it's a cross-disciplinary sub-field of study referred to as inflationary psychology. Earlier this month, the WSJ had an article discussing why the Fed is fearful of inflationary psychology.
I get what you’re saying, but once the blaze is set weather can have a big effect on the fire. I think of a big rain of discounted goods at Target and REI if you’re trying to find a reason why the fire can be brought under control. Hopefully for good. I even saw the crab cakes we buy at the market drop in price this week. I had to rub my eyes since falling food prices are, umm.. not something any of us are used to. Maybe there’s less meat in them. I’ll have to see.
Perhaps I'm wrong, but even if all the supply chain problems were immediately resolved and things were back to where they were in late 2019 (another pipe dream), I don't think that inflation would immediately drop to 2% annualized. Inflationary psychology would seemingly prevent that or anything akin to it.
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Wanderingwheelz
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Wanderingwheelz »

willthrill81 wrote: Sun Jul 24, 2022 8:01 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 7:54 pm
willthrill81 wrote: Sun Jul 24, 2022 7:50 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 7:44 pm
willthrill81 wrote: Sun Jul 24, 2022 7:37 pm

Either inflation stays high and continues to quickly erode everyone's buying power or the Fed continues to increase interest rates until the economy finally cries 'uncle' and inflation comes down. Heads, I win, tails, you lose. Inflation magically falling on its own is a pipe dream that far too many here have indulged in.
Why are you so dismissive of the supply side?
I'm not dismissive of it, but it seems to be more like the lighter that started a blaze. Turning off the lighter doesn't put out the blaze because it's self-sustaining. Consumers are likely now expecting high inflation, which turns into a self-fulfilling prophecy. This is so widely known that it's a cross-disciplinary sub-field of study referred to as inflationary psychology. Earlier this month, the WSJ had an article discussing why the Fed is fearful of inflationary psychology.
I get what you’re saying, but once the blaze is set weather can have a big effect on the fire. I think of a big rain of discounted goods at Target and REI if you’re trying to find a reason why the fire can be brought under control. Hopefully for good. I even saw the crab cakes we buy at the market drop in price this week. I had to rub my eyes since falling food prices are, umm.. not something any of us are used to. Maybe there’s less meat in them. I’ll have to see.
Perhaps I'm wrong, but even if all the supply chain problems were immediately resolved and things were back to where they were in late 2019 (another pipe dream), I don't think that inflation would immediately drop to 2% annualized. Inflationary psychology would seemingly prevent that or anything akin to it.
I didn’t say inflation was going to immediately drop to 2%. All we need is for things to moderate since the economy is actually in pretty good shape, all things considered. As I said further up thread, if I had no investments to view or access to the news and my only gauge was my business, I’d guess we are basically in a massive expansion. That said the business did remarkably well during the GFC, so perhaps I’m the last person to listen to.
Being wrong compounds forever.
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willthrill81
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by willthrill81 »

Wanderingwheelz wrote: Sun Jul 24, 2022 8:06 pm
willthrill81 wrote: Sun Jul 24, 2022 8:01 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 7:54 pm
willthrill81 wrote: Sun Jul 24, 2022 7:50 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 7:44 pm

Why are you so dismissive of the supply side?
I'm not dismissive of it, but it seems to be more like the lighter that started a blaze. Turning off the lighter doesn't put out the blaze because it's self-sustaining. Consumers are likely now expecting high inflation, which turns into a self-fulfilling prophecy. This is so widely known that it's a cross-disciplinary sub-field of study referred to as inflationary psychology. Earlier this month, the WSJ had an article discussing why the Fed is fearful of inflationary psychology.
I get what you’re saying, but once the blaze is set weather can have a big effect on the fire. I think of a big rain of discounted goods at Target and REI if you’re trying to find a reason why the fire can be brought under control. Hopefully for good. I even saw the crab cakes we buy at the market drop in price this week. I had to rub my eyes since falling food prices are, umm.. not something any of us are used to. Maybe there’s less meat in them. I’ll have to see.
Perhaps I'm wrong, but even if all the supply chain problems were immediately resolved and things were back to where they were in late 2019 (another pipe dream), I don't think that inflation would immediately drop to 2% annualized. Inflationary psychology would seemingly prevent that or anything akin to it.
I didn’t say inflation was going to immediately drop to 2%. All we need is for things to moderate since the economy is actually in pretty good shape, all things considered. As I said further up thread, if I had no investments to view or access to the news and my only gauge was my business, I’d guess we are basically in a massive expansion. That said the business did remarkably well during the GFC, so perhaps I’m the last person to listen to.
Seemingly strong economies are part of the problem though. Once the inflationary psychology sets in, everyone wants to buy NOW before prices increase even further. A box of cereal has a lot better return than Treasuries right now. Historically, about the only way that the inflation can be reined in is by sending the economy into a recession. I'm not aware of any macro-level instances where a ready supply of goods and services alone brought inflation down from being 'high' to 'low'.

Perhaps you're in an insulated business/sector/physical area. If so, count your blessings. :D
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Wanderingwheelz
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Wanderingwheelz »

willthrill81 wrote: Sun Jul 24, 2022 8:11 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 8:06 pm
willthrill81 wrote: Sun Jul 24, 2022 8:01 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 7:54 pm
willthrill81 wrote: Sun Jul 24, 2022 7:50 pm

I'm not dismissive of it, but it seems to be more like the lighter that started a blaze. Turning off the lighter doesn't put out the blaze because it's self-sustaining. Consumers are likely now expecting high inflation, which turns into a self-fulfilling prophecy. This is so widely known that it's a cross-disciplinary sub-field of study referred to as inflationary psychology. Earlier this month, the WSJ had an article discussing why the Fed is fearful of inflationary psychology.
I get what you’re saying, but once the blaze is set weather can have a big effect on the fire. I think of a big rain of discounted goods at Target and REI if you’re trying to find a reason why the fire can be brought under control. Hopefully for good. I even saw the crab cakes we buy at the market drop in price this week. I had to rub my eyes since falling food prices are, umm.. not something any of us are used to. Maybe there’s less meat in them. I’ll have to see.
Perhaps I'm wrong, but even if all the supply chain problems were immediately resolved and things were back to where they were in late 2019 (another pipe dream), I don't think that inflation would immediately drop to 2% annualized. Inflationary psychology would seemingly prevent that or anything akin to it.
I didn’t say inflation was going to immediately drop to 2%. All we need is for things to moderate since the economy is actually in pretty good shape, all things considered. As I said further up thread, if I had no investments to view or access to the news and my only gauge was my business, I’d guess we are basically in a massive expansion. That said the business did remarkably well during the GFC, so perhaps I’m the last person to listen to.
Seemingly strong economies are part of the problem though. Once the inflationary psychology sets in, everyone wants to buy NOW before prices increase even further. A box of cereal has a lot better return than Treasuries right now. Historically, about the only way that the inflation can be reined in is by sending the economy into a recession. I'm not aware of any macro-level instances where a ready supply of goods and services alone brought inflation down from being 'high' to 'low'.

Perhaps you're in an insulated business/sector/physical area. If so, count your blessings. :D
After the last 30 months or so, why would anyone expect what’s coming to resemble anything that’s happened before?

I agree that a strong economy is something we’ve been led to believe is a problem. Not everyone is on a salary though. I’m perfect happy to pay 42 cents more for a bag of corn chips if it means that my business can do 30% more revenue than what would happen if the fed destroys the economy.

I’m not quite ready to shift my bond allocation to Lucky Charms and Cinnamon Toast Crunch, but I appreciate the tip.
Being wrong compounds forever.
latesaver
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by latesaver »

Wanderingwheelz wrote: Sun Jul 24, 2022 8:27 pm
willthrill81 wrote: Sun Jul 24, 2022 8:11 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 8:06 pm
willthrill81 wrote: Sun Jul 24, 2022 8:01 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 7:54 pm

I get what you’re saying, but once the blaze is set weather can have a big effect on the fire. I think of a big rain of discounted goods at Target and REI if you’re trying to find a reason why the fire can be brought under control. Hopefully for good. I even saw the crab cakes we buy at the market drop in price this week. I had to rub my eyes since falling food prices are, umm.. not something any of us are used to. Maybe there’s less meat in them. I’ll have to see.
Perhaps I'm wrong, but even if all the supply chain problems were immediately resolved and things were back to where they were in late 2019 (another pipe dream), I don't think that inflation would immediately drop to 2% annualized. Inflationary psychology would seemingly prevent that or anything akin to it.
I didn’t say inflation was going to immediately drop to 2%. All we need is for things to moderate since the economy is actually in pretty good shape, all things considered. As I said further up thread, if I had no investments to view or access to the news and my only gauge was my business, I’d guess we are basically in a massive expansion. That said the business did remarkably well during the GFC, so perhaps I’m the last person to listen to.
Seemingly strong economies are part of the problem though. Once the inflationary psychology sets in, everyone wants to buy NOW before prices increase even further. A box of cereal has a lot better return than Treasuries right now. Historically, about the only way that the inflation can be reined in is by sending the economy into a recession. I'm not aware of any macro-level instances where a ready supply of goods and services alone brought inflation down from being 'high' to 'low'.

Perhaps you're in an insulated business/sector/physical area. If so, count your blessings. :D
After the last 30 months or so, why would anyone expect what’s coming to resemble anything that’s happened before?

I agree that a strong economy is something we’ve been led to believe is a problem. Not everyone is on a salary though. I’m perfect happy to pay 42 cents more for a bag of corn chips if it means that my business can do 30% more revenue than what would happen if the fed destroys the economy.

I’m not quite ready to shift my bond allocation to Lucky Charms and Cinnamon Toast Crunch, but I appreciate the tip.
Rest easy, you might be correct. The best way to opt out of these winless debates is to keep working past 3% SWR down to a 2.5% SWR...
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willthrill81
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by willthrill81 »

Wanderingwheelz wrote: Sun Jul 24, 2022 8:27 pm
willthrill81 wrote: Sun Jul 24, 2022 8:11 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 8:06 pm
willthrill81 wrote: Sun Jul 24, 2022 8:01 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 7:54 pm I get what you’re saying, but once the blaze is set weather can have a big effect on the fire. I think of a big rain of discounted goods at Target and REI if you’re trying to find a reason why the fire can be brought under control. Hopefully for good. I even saw the crab cakes we buy at the market drop in price this week. I had to rub my eyes since falling food prices are, umm.. not something any of us are used to. Maybe there’s less meat in them. I’ll have to see.
Perhaps I'm wrong, but even if all the supply chain problems were immediately resolved and things were back to where they were in late 2019 (another pipe dream), I don't think that inflation would immediately drop to 2% annualized. Inflationary psychology would seemingly prevent that or anything akin to it.
I didn’t say inflation was going to immediately drop to 2%. All we need is for things to moderate since the economy is actually in pretty good shape, all things considered. As I said further up thread, if I had no investments to view or access to the news and my only gauge was my business, I’d guess we are basically in a massive expansion. That said the business did remarkably well during the GFC, so perhaps I’m the last person to listen to.
Seemingly strong economies are part of the problem though. Once the inflationary psychology sets in, everyone wants to buy NOW before prices increase even further. A box of cereal has a lot better return than Treasuries right now. Historically, about the only way that the inflation can be reined in is by sending the economy into a recession. I'm not aware of any macro-level instances where a ready supply of goods and services alone brought inflation down from being 'high' to 'low'.

Perhaps you're in an insulated business/sector/physical area. If so, count your blessings. :D
After the last 30 months or so, why would anyone expect what’s coming to resemble anything that’s happened before?
So, it's different this time? Where have I heard that before... :wink:
Wanderingwheelz wrote: Sun Jul 24, 2022 8:27 pm I agree that a strong economy is something we’ve been led to believe is a problem. Not everyone is on a salary though. I’m perfect happy to pay 42 cents more for a bag of corn chips if it means that my business can do 30% more revenue than what would happen if the fed destroys the economy.
Overheated economies seem good but aren't.
An overheated economy is when the economy grows too fast. An overheated economy reaches the limits of how much output it can produce to meet the demand from consumers and businesses, as there are very little unused resources. This typically occurs when the economy is employed beyond what is considered “full employment.”
https://www.thebalance.com/overheated-economy-5214761

That sure seems to describe what we're seeing now. And, if so, there's only been one consistent solution: tighten monetary policy.
Wanderingwheelz wrote: Sun Jul 24, 2022 8:27 pm I’m not quite ready to shift my bond allocation to Lucky Charms and Cinnamon Toast Crunch, but I appreciate the tip.
No prob. :beer
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alluringreality
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by alluringreality »

JBTX wrote: Sun Jul 24, 2022 2:59 pm
alluringreality wrote: Sat Jul 23, 2022 6:16 pm
JBTX wrote: Fri Jul 22, 2022 6:49 pm I’m not exactly clear from your post above if you are agreeing or disagreeing.
I'm not inclined to trust anyone willing to make the following comment in January and then say fair price is around the average historical S&P 500 bear market decline in July.
"Super bubbles can pretty much wipe you out like 1929. And that’s where we are now."
https://www.cmgwealth.com/ri/on-my-rada ... until-now/
https://www.google.com/url?sa=t&source= ... wfH5vY5YY2
If you followed what he has said over the years there is nothing inconsistent in his statements.
I have no reason to follow his "humble" opinion over multiple years, yet apparently the following was when it changed later in May. He had described "30, 40 to 50% area" as a "bubble" or "two sigma event", and he recently indicated that fair price falls in that range. "Three sigma events" or "superbubbles" seem to rely on a greater deviation for definition, and he was previously putting current events into that category along with declines from 1929, 2000, 2006, and Japan. "You shouldn’t kid yourself that you can know what’s going on" seems interesting, mainly for the lack of self-reference. Anyway, apparently the following inverview marks where his opinion changed.
https://www.thinkadvisor.com/2022/03/23 ... s-gone-up/
Last edited by alluringreality on Mon Jul 25, 2022 8:49 am, edited 7 times in total.
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marcopolo
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by marcopolo »

willthrill81 wrote: Sun Jul 24, 2022 8:11 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 8:06 pm
willthrill81 wrote: Sun Jul 24, 2022 8:01 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 7:54 pm
willthrill81 wrote: Sun Jul 24, 2022 7:50 pm

I'm not dismissive of it, but it seems to be more like the lighter that started a blaze. Turning off the lighter doesn't put out the blaze because it's self-sustaining. Consumers are likely now expecting high inflation, which turns into a self-fulfilling prophecy. This is so widely known that it's a cross-disciplinary sub-field of study referred to as inflationary psychology. Earlier this month, the WSJ had an article discussing why the Fed is fearful of inflationary psychology.
I get what you’re saying, but once the blaze is set weather can have a big effect on the fire. I think of a big rain of discounted goods at Target and REI if you’re trying to find a reason why the fire can be brought under control. Hopefully for good. I even saw the crab cakes we buy at the market drop in price this week. I had to rub my eyes since falling food prices are, umm.. not something any of us are used to. Maybe there’s less meat in them. I’ll have to see.
Perhaps I'm wrong, but even if all the supply chain problems were immediately resolved and things were back to where they were in late 2019 (another pipe dream), I don't think that inflation would immediately drop to 2% annualized. Inflationary psychology would seemingly prevent that or anything akin to it.
I didn’t say inflation was going to immediately drop to 2%. All we need is for things to moderate since the economy is actually in pretty good shape, all things considered. As I said further up thread, if I had no investments to view or access to the news and my only gauge was my business, I’d guess we are basically in a massive expansion. That said the business did remarkably well during the GFC, so perhaps I’m the last person to listen to.
Seemingly strong economies are part of the problem though. Once the inflationary psychology sets in, everyone wants to buy NOW before prices increase even further. A box of cereal has a lot better return than Treasuries right now. Historically, about the only way that the inflation can be reined in is by sending the economy into a recession. I'm not aware of any macro-level instances where a ready supply of goods and services alone brought inflation down from being 'high' to 'low'.

Perhaps you're in an insulated business/sector/physical area. If so, count your blessings. :D
How many instances have you observed where the global supply chain was brought to a grinding halt for a year or more?

Do you expect auto dealers to keep prices $5k+ above MSRP, even after the chip shortages resolve and autos are plentiful on the lot, for example.

Have the laws of supply and demand been repealed?
Once in a while you get shown the light, in the strangest of places if you look at it right.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by JBTX »

HomerJ wrote: Sun Jul 24, 2022 3:28 pm
JBTX wrote: Sun Jul 24, 2022 2:53 pm
HomerJ wrote: Sun Jul 24, 2022 12:56 am
alluringreality wrote: Fri Jul 22, 2022 5:12 pm It looks like his opinion on fair value has increased roughly 20%. That means he isn't continuing to suggest a total decline between nearly 40%-60% from the NBC interview in May.
Q: Are you still thinking the S&P 500 could fall to 2,400 — a 36% drop from Wednesday’s close of roughly 3,800?

A: That’s an old target. What’s fair value for the S&P 500 a year from now? It’s going to be pretty close to 3,000. There is absolutely nothing to stop the market from going below fair value. It’s certainly entitled to spend several months below 3,000.
https://apnews.com/article/financial-cr ... 4f196a97ab
LOL... He said 2400 this year, and now he's changed it to 3000. If it drops to 3000, he'll say he was right, and and if drops to 2400, he'll pull out the original prediction and say he was right.
He said fair value is 3000, and the market could very well go lower and stay there, and said that quite often that is what happens in bubble corrections. I’m not predicting he is right or wrong but at least accurately portray what he is saying.
In the youtube video posted (don't post videos please, I hate watching those... Let me read transcripts instead) he said, and I quote, "The trend-line being slightly generous is 2500. And most of the great bubbles the super bubbles go below trend line"

So in January, he was predicting fair value of 2500 (sorry not 2400), with a good chance it would fall further.

NOW, he's changed it to 3000, with a fair chance of falling further.

He himself says above... "That's an OLD target..." Old meaning 6 months ago... So, yes I'm portraying him correctly when I say he's got all kinds of predictions out there, and no matter which one comes true, he can claim success.

I can go back every year and find a prediction from him.

In June 2020, when the SP500 was at 3200, Grantham made the recommendation that investors should have 0% in stocks.
The investing legend Jeremy Grantham seems certain that the US stock market's strong recovery from its historic lows in March will end in pain for investors.

"My confidence is rising quite rapidly that this is, in fact, becoming the fourth 'real McCoy' bubble of my investment career," he told CNBC's "Closing Bell" on Wednesday.

On investor exposure to equities, Grantham said, "I think a good number in the US would be zero, and less than zero might not be a bad idea if you can stand that."
https://markets.businessinsider.com/new ... e=markets

He suggested 0% in US stocks in June 2020. Even maybe shorting the US market. And the US market then went up 50% in 18 months. It's still up 22% in the past 2 years, even after the recent crash.
Grantham is stupid? Really?
No, Grantham is smart... He's a millionaire who keeps making bad predictions, yet continues to get invited to talk shows and podcasts, and interviewed for even more predictions.

Those of us who desperately continue to listen to predictions, ignoring evidence that no one is very good at making predictions, we are the stupid ones.

But we're human, so it's normal. We want to believe.

He said 3000 was a fair value. It wasn’t a prediction and he specifically said it could very well go substantially lower than 3000.

Besides, when the market was near 5000, and he predicts it to go to 2500, and instead it “only” goes to 3000, is that a terrible prediction?
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by JBTX »

marcopolo wrote: Sun Jul 24, 2022 4:13 pm
JBTX wrote: Sun Jul 24, 2022 2:59 pm
alluringreality wrote: Sat Jul 23, 2022 6:16 pm
JBTX wrote: Fri Jul 22, 2022 6:49 pm I’m not exactly clear from your post above if you are agreeing or disagreeing.
I'm not inclined to trust anyone willing to make the following comment in January and then say fair price is around the average historical S&P 500 bear market decline in July.
"Super bubbles can pretty much wipe you out like 1929. And that’s where we are now."
https://www.cmgwealth.com/ri/on-my-rada ... until-now/
https://www.google.com/url?sa=t&source= ... wfH5vY5YY2
If you followed what he has said over the years there is nothing inconsistent in his statements.

It seem he has made a number of predictions in the last decade, some more conflicting than others, very few that have turned out to be accurate.

What would it take to get you to at least consider that his predictions, like those of just about any market prognosticator, is not very useful?

Another couple of years, another decade, of inaccurate predictions? Or does the fact that markets crash from time to time, make him always worth paying attention to, in your opinion.
I said his statements were not inconsistent. That doesn’t mean they were correct (or not).

I find value in what he writes. I don’t find a lot of value in his specific predictions, as to whether or when and how much something may crash. But I do find value in helping to understand the potential risks involved.

At a very macro level, he is pretty good at identifying major trends and excesses such as bubbles, but his timing can be way off, sometimes so far off as to not be useful as a course of action.

I am generally not making changes based upon he says and certainly don’t follow his specific recommendations. But his information might inform modest changes in asset allocation as a risk mitigation strategy.

Whatever the case he does have interesting information.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by willthrill81 »

marcopolo wrote: Sun Jul 24, 2022 10:24 pm
willthrill81 wrote: Sun Jul 24, 2022 8:11 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 8:06 pm
willthrill81 wrote: Sun Jul 24, 2022 8:01 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 7:54 pm

I get what you’re saying, but once the blaze is set weather can have a big effect on the fire. I think of a big rain of discounted goods at Target and REI if you’re trying to find a reason why the fire can be brought under control. Hopefully for good. I even saw the crab cakes we buy at the market drop in price this week. I had to rub my eyes since falling food prices are, umm.. not something any of us are used to. Maybe there’s less meat in them. I’ll have to see.
Perhaps I'm wrong, but even if all the supply chain problems were immediately resolved and things were back to where they were in late 2019 (another pipe dream), I don't think that inflation would immediately drop to 2% annualized. Inflationary psychology would seemingly prevent that or anything akin to it.
I didn’t say inflation was going to immediately drop to 2%. All we need is for things to moderate since the economy is actually in pretty good shape, all things considered. As I said further up thread, if I had no investments to view or access to the news and my only gauge was my business, I’d guess we are basically in a massive expansion. That said the business did remarkably well during the GFC, so perhaps I’m the last person to listen to.
Seemingly strong economies are part of the problem though. Once the inflationary psychology sets in, everyone wants to buy NOW before prices increase even further. A box of cereal has a lot better return than Treasuries right now. Historically, about the only way that the inflation can be reined in is by sending the economy into a recession. I'm not aware of any macro-level instances where a ready supply of goods and services alone brought inflation down from being 'high' to 'low'.

Perhaps you're in an insulated business/sector/physical area. If so, count your blessings. :D
How many instances have you observed where the global supply chain was brought to a grinding halt for a year or more?

Do you expect auto dealers to keep prices $5k+ above MSRP, even after the chip shortages resolve and autos are plentiful on the lot, for example.

Have the laws of supply and demand been repealed?
Was there a sudden spike in food demand starting last year? Was there a major famine in the U.S.?
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by JBTX »

marcopolo wrote: Sun Jul 24, 2022 10:24 pm
willthrill81 wrote: Sun Jul 24, 2022 8:11 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 8:06 pm
willthrill81 wrote: Sun Jul 24, 2022 8:01 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 7:54 pm

I get what you’re saying, but once the blaze is set weather can have a big effect on the fire. I think of a big rain of discounted goods at Target and REI if you’re trying to find a reason why the fire can be brought under control. Hopefully for good. I even saw the crab cakes we buy at the market drop in price this week. I had to rub my eyes since falling food prices are, umm.. not something any of us are used to. Maybe there’s less meat in them. I’ll have to see.
Perhaps I'm wrong, but even if all the supply chain problems were immediately resolved and things were back to where they were in late 2019 (another pipe dream), I don't think that inflation would immediately drop to 2% annualized. Inflationary psychology would seemingly prevent that or anything akin to it.
I didn’t say inflation was going to immediately drop to 2%. All we need is for things to moderate since the economy is actually in pretty good shape, all things considered. As I said further up thread, if I had no investments to view or access to the news and my only gauge was my business, I’d guess we are basically in a massive expansion. That said the business did remarkably well during the GFC, so perhaps I’m the last person to listen to.
Seemingly strong economies are part of the problem though. Once the inflationary psychology sets in, everyone wants to buy NOW before prices increase even further. A box of cereal has a lot better return than Treasuries right now. Historically, about the only way that the inflation can be reined in is by sending the economy into a recession. I'm not aware of any macro-level instances where a ready supply of goods and services alone brought inflation down from being 'high' to 'low'.

Perhaps you're in an insulated business/sector/physical area. If so, count your blessings. :D
How many instances have you observed where the global supply chain was brought to a grinding halt for a year or more?

Do you expect auto dealers to keep prices $5k+ above MSRP, even after the chip shortages resolve and autos are plentiful on the lot, for example.

Have the laws of supply and demand been repealed?
There are interim lots full of new cars still awaiting chips more than 2 years later. You still have variants of Covid going around and China has repeatedly incurred shut downs. There are still commodity shortages and interruptions for Ukraine war, and if fully enacted in coming months the next wave of sanctions could have significant energy price shocks. I am not sure we know the full effects on longer term food supply. If China were to move on Taiwan then you have even bigger issues. Even apart from that companies are starting to modify their supply chains based on geopolitics which could cause further disruptions.

Longer term demographically developed countries are aging and the workforce is stagnating or even declining. New leaked data out of China indicate they may already be significantly declining population and have been exaggerating their population numbers.

Obviously a lot of things can happen and there still could be some longer term countervailing forces, but it isn’t hard at all to see a longer term above average inflationary environment.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by willthrill81 »

JBTX wrote: Mon Jul 25, 2022 12:01 am
marcopolo wrote: Sun Jul 24, 2022 10:24 pm
willthrill81 wrote: Sun Jul 24, 2022 8:11 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 8:06 pm
willthrill81 wrote: Sun Jul 24, 2022 8:01 pm

Perhaps I'm wrong, but even if all the supply chain problems were immediately resolved and things were back to where they were in late 2019 (another pipe dream), I don't think that inflation would immediately drop to 2% annualized. Inflationary psychology would seemingly prevent that or anything akin to it.
I didn’t say inflation was going to immediately drop to 2%. All we need is for things to moderate since the economy is actually in pretty good shape, all things considered. As I said further up thread, if I had no investments to view or access to the news and my only gauge was my business, I’d guess we are basically in a massive expansion. That said the business did remarkably well during the GFC, so perhaps I’m the last person to listen to.
Seemingly strong economies are part of the problem though. Once the inflationary psychology sets in, everyone wants to buy NOW before prices increase even further. A box of cereal has a lot better return than Treasuries right now. Historically, about the only way that the inflation can be reined in is by sending the economy into a recession. I'm not aware of any macro-level instances where a ready supply of goods and services alone brought inflation down from being 'high' to 'low'.

Perhaps you're in an insulated business/sector/physical area. If so, count your blessings. :D
How many instances have you observed where the global supply chain was brought to a grinding halt for a year or more?

Do you expect auto dealers to keep prices $5k+ above MSRP, even after the chip shortages resolve and autos are plentiful on the lot, for example.

Have the laws of supply and demand been repealed?
There are interim lots full of new cars still awaiting chips more than 2 years later. You still have variants of Covid going around and China has repeatedly incurred shut downs. There are still commodity shortages and interruptions for Ukraine war, and if fully enacted in coming months the next wave of sanctions could have significant energy price shocks. I am not sure we know the full effects on longer term food supply. If China were to move on Taiwan then you have even bigger issues. Even apart from that companies are starting to modify their supply chains based on geopolitics which could cause further disruptions.

Longer term demographically developed countries are aging and the workforce is stagnating or even declining. New leaked data out of China indicate they may already be significantly declining population and have been exaggerating their population numbers.

Obviously a lot of things can happen and there still could be some longer term countervailing forces, but it isn’t hard at all to see a longer term above average inflationary environment.
And the longer the inflation persists, the more engrained inflationary psychology will become, and the harder it will be to bring inflation down.

This isn't some cockeyed theory from left-field, and it isn't controversial off this forum. Heck, it was in the WSJ two weeks ago and Barron's back in April.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by marcopolo »

JBTX wrote: Mon Jul 25, 2022 12:01 am
marcopolo wrote: Sun Jul 24, 2022 10:24 pm
willthrill81 wrote: Sun Jul 24, 2022 8:11 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 8:06 pm
willthrill81 wrote: Sun Jul 24, 2022 8:01 pm

Perhaps I'm wrong, but even if all the supply chain problems were immediately resolved and things were back to where they were in late 2019 (another pipe dream), I don't think that inflation would immediately drop to 2% annualized. Inflationary psychology would seemingly prevent that or anything akin to it.
I didn’t say inflation was going to immediately drop to 2%. All we need is for things to moderate since the economy is actually in pretty good shape, all things considered. As I said further up thread, if I had no investments to view or access to the news and my only gauge was my business, I’d guess we are basically in a massive expansion. That said the business did remarkably well during the GFC, so perhaps I’m the last person to listen to.
Seemingly strong economies are part of the problem though. Once the inflationary psychology sets in, everyone wants to buy NOW before prices increase even further. A box of cereal has a lot better return than Treasuries right now. Historically, about the only way that the inflation can be reined in is by sending the economy into a recession. I'm not aware of any macro-level instances where a ready supply of goods and services alone brought inflation down from being 'high' to 'low'.

Perhaps you're in an insulated business/sector/physical area. If so, count your blessings. :D
How many instances have you observed where the global supply chain was brought to a grinding halt for a year or more?

Do you expect auto dealers to keep prices $5k+ above MSRP, even after the chip shortages resolve and autos are plentiful on the lot, for example.

Have the laws of supply and demand been repealed?
There are interim lots full of new cars still awaiting chips more than 2 years later. You still have variants of Covid going around and China has repeatedly incurred shut downs. There are still commodity shortages and interruptions for Ukraine war, and if fully enacted in coming months the next wave of sanctions could have significant energy price shocks. I am not sure we know the full effects on longer term food supply. If China were to move on Taiwan then you have even bigger issues. Even apart from that companies are starting to modify their supply chains based on geopolitics which could cause further disruptions.

Longer term demographically developed countries are aging and the workforce is stagnating or even declining. New leaked data out of China indicate they may already be significantly declining population and have been exaggerating their population numbers.

Obviously a lot of things can happen and there still could be some longer term countervailing forces, but it isn’t hard at all to see a longer term above average inflationary environment.
I largely agree with most of what you are saying.

Most of those things are supply side issues, which is the point I was making. See the text I bolded that I was responding to.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by JBTX »

willthrill81 wrote: Mon Jul 25, 2022 12:05 am
JBTX wrote: Mon Jul 25, 2022 12:01 am
marcopolo wrote: Sun Jul 24, 2022 10:24 pm
willthrill81 wrote: Sun Jul 24, 2022 8:11 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 8:06 pm

I didn’t say inflation was going to immediately drop to 2%. All we need is for things to moderate since the economy is actually in pretty good shape, all things considered. As I said further up thread, if I had no investments to view or access to the news and my only gauge was my business, I’d guess we are basically in a massive expansion. That said the business did remarkably well during the GFC, so perhaps I’m the last person to listen to.
Seemingly strong economies are part of the problem though. Once the inflationary psychology sets in, everyone wants to buy NOW before prices increase even further. A box of cereal has a lot better return than Treasuries right now. Historically, about the only way that the inflation can be reined in is by sending the economy into a recession. I'm not aware of any macro-level instances where a ready supply of goods and services alone brought inflation down from being 'high' to 'low'.

Perhaps you're in an insulated business/sector/physical area. If so, count your blessings. :D
How many instances have you observed where the global supply chain was brought to a grinding halt for a year or more?

Do you expect auto dealers to keep prices $5k+ above MSRP, even after the chip shortages resolve and autos are plentiful on the lot, for example.

Have the laws of supply and demand been repealed?
There are interim lots full of new cars still awaiting chips more than 2 years later. You still have variants of Covid going around and China has repeatedly incurred shut downs. There are still commodity shortages and interruptions for Ukraine war, and if fully enacted in coming months the next wave of sanctions could have significant energy price shocks. I am not sure we know the full effects on longer term food supply. If China were to move on Taiwan then you have even bigger issues. Even apart from that companies are starting to modify their supply chains based on geopolitics which could cause further disruptions.

Longer term demographically developed countries are aging and the workforce is stagnating or even declining. New leaked data out of China indicate they may already be significantly declining population and have been exaggerating their population numbers.

Obviously a lot of things can happen and there still could be some longer term countervailing forces, but it isn’t hard at all to see a longer term above average inflationary environment.
And the longer the inflation persists, the more engrained inflationary psychology will become, and the harder it will be to bring inflation down.

This isn't some cockeyed theory from left-field, and it isn't controversial off this forum. Heck, it was in the WSJ two weeks ago and Barron's back in April.
This is true.

I think the tendency is to assume things will return to “normal” as we experienced the prior 30 years or so. But it may well be that was an exceptional period. We are now leaving a unipolar world and becoming a multipolar world and some of the trends that were tail winds to economic growth, low prices, etc may be exhausting or reversing entirely. We tend to look at Covid or Ukraine situation as exceptions but such scenarios may become the new normal.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by marcopolo »

JBTX wrote: Mon Jul 25, 2022 12:20 am
willthrill81 wrote: Mon Jul 25, 2022 12:05 am
JBTX wrote: Mon Jul 25, 2022 12:01 am
marcopolo wrote: Sun Jul 24, 2022 10:24 pm
willthrill81 wrote: Sun Jul 24, 2022 8:11 pm

Seemingly strong economies are part of the problem though. Once the inflationary psychology sets in, everyone wants to buy NOW before prices increase even further. A box of cereal has a lot better return than Treasuries right now. Historically, about the only way that the inflation can be reined in is by sending the economy into a recession. I'm not aware of any macro-level instances where a ready supply of goods and services alone brought inflation down from being 'high' to 'low'.

Perhaps you're in an insulated business/sector/physical area. If so, count your blessings. :D
How many instances have you observed where the global supply chain was brought to a grinding halt for a year or more?

Do you expect auto dealers to keep prices $5k+ above MSRP, even after the chip shortages resolve and autos are plentiful on the lot, for example.

Have the laws of supply and demand been repealed?
There are interim lots full of new cars still awaiting chips more than 2 years later. You still have variants of Covid going around and China has repeatedly incurred shut downs. There are still commodity shortages and interruptions for Ukraine war, and if fully enacted in coming months the next wave of sanctions could have significant energy price shocks. I am not sure we know the full effects on longer term food supply. If China were to move on Taiwan then you have even bigger issues. Even apart from that companies are starting to modify their supply chains based on geopolitics which could cause further disruptions.

Longer term demographically developed countries are aging and the workforce is stagnating or even declining. New leaked data out of China indicate they may already be significantly declining population and have been exaggerating their population numbers.

Obviously a lot of things can happen and there still could be some longer term countervailing forces, but it isn’t hard at all to see a longer term above average inflationary environment.
And the longer the inflation persists, the more engrained inflationary psychology will become, and the harder it will be to bring inflation down.

This isn't some cockeyed theory from left-field, and it isn't controversial off this forum. Heck, it was in the WSJ two weeks ago and Barron's back in April.
This is true.

I think the tendency is to assume things will return to “normal” as we experienced the prior 30 years or so. But it may well be that was an exceptional period. We are now leaving a unipolar world and becoming a multipolar world and some of the trends that were tail winds to economic growth, low prices, etc may be exhausting or reversing entirely. We tend to look at Covid or Ukraine situation as exceptions but such scenarios may become the new normal.
I suspect there is some of that "expecting return to normal" going on.
I also think that on the other side there is a bit of "whatever we have recently will just persist forever" going on.

Not sure which force will prevail.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by JBTX »

marcopolo wrote: Mon Jul 25, 2022 12:17 am
JBTX wrote: Mon Jul 25, 2022 12:01 am
marcopolo wrote: Sun Jul 24, 2022 10:24 pm
willthrill81 wrote: Sun Jul 24, 2022 8:11 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 8:06 pm

I didn’t say inflation was going to immediately drop to 2%. All we need is for things to moderate since the economy is actually in pretty good shape, all things considered. As I said further up thread, if I had no investments to view or access to the news and my only gauge was my business, I’d guess we are basically in a massive expansion. That said the business did remarkably well during the GFC, so perhaps I’m the last person to listen to.
Seemingly strong economies are part of the problem though. Once the inflationary psychology sets in, everyone wants to buy NOW before prices increase even further. A box of cereal has a lot better return than Treasuries right now. Historically, about the only way that the inflation can be reined in is by sending the economy into a recession. I'm not aware of any macro-level instances where a ready supply of goods and services alone brought inflation down from being 'high' to 'low'.

Perhaps you're in an insulated business/sector/physical area. If so, count your blessings. :D
How many instances have you observed where the global supply chain was brought to a grinding halt for a year or more?

Do you expect auto dealers to keep prices $5k+ above MSRP, even after the chip shortages resolve and autos are plentiful on the lot, for example.

Have the laws of supply and demand been repealed?
There are interim lots full of new cars still awaiting chips more than 2 years later. You still have variants of Covid going around and China has repeatedly incurred shut downs. There are still commodity shortages and interruptions for Ukraine war, and if fully enacted in coming months the next wave of sanctions could have significant energy price shocks. I am not sure we know the full effects on longer term food supply. If China were to move on Taiwan then you have even bigger issues. Even apart from that companies are starting to modify their supply chains based on geopolitics which could cause further disruptions.

Longer term demographically developed countries are aging and the workforce is stagnating or even declining. New leaked data out of China indicate they may already be significantly declining population and have been exaggerating their population numbers.

Obviously a lot of things can happen and there still could be some longer term countervailing forces, but it isn’t hard at all to see a longer term above average inflationary environment.
I largely agree with most of what you are saying.

Most of those things are supply side issues, which is the point I was making. See the text I bolded that I was responding to.
I think his point was even after supply side issues are resolved, by that time inflation has momentum and doesn’t just quickly reverse. From my perspective this all started with supply side issues coupled with unprecedented demand side stimulus leading to inflation, followed by more unexpected supply side issues and the prospect of some longer term supply side issues such as labor. The demand side issues may be working themselves out to a degree but still remain, and at this point regardless inflationary expectations are baked in and it becomes similar to physics - once a body is in motion it tends to stay in motion.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by marcopolo »

willthrill81 wrote: Mon Jul 25, 2022 12:05 am
JBTX wrote: Mon Jul 25, 2022 12:01 am
marcopolo wrote: Sun Jul 24, 2022 10:24 pm
willthrill81 wrote: Sun Jul 24, 2022 8:11 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 8:06 pm

I didn’t say inflation was going to immediately drop to 2%. All we need is for things to moderate since the economy is actually in pretty good shape, all things considered. As I said further up thread, if I had no investments to view or access to the news and my only gauge was my business, I’d guess we are basically in a massive expansion. That said the business did remarkably well during the GFC, so perhaps I’m the last person to listen to.
Seemingly strong economies are part of the problem though. Once the inflationary psychology sets in, everyone wants to buy NOW before prices increase even further. A box of cereal has a lot better return than Treasuries right now. Historically, about the only way that the inflation can be reined in is by sending the economy into a recession. I'm not aware of any macro-level instances where a ready supply of goods and services alone brought inflation down from being 'high' to 'low'.

Perhaps you're in an insulated business/sector/physical area. If so, count your blessings. :D
How many instances have you observed where the global supply chain was brought to a grinding halt for a year or more?

Do you expect auto dealers to keep prices $5k+ above MSRP, even after the chip shortages resolve and autos are plentiful on the lot, for example.

Have the laws of supply and demand been repealed?
There are interim lots full of new cars still awaiting chips more than 2 years later. You still have variants of Covid going around and China has repeatedly incurred shut downs. There are still commodity shortages and interruptions for Ukraine war, and if fully enacted in coming months the next wave of sanctions could have significant energy price shocks. I am not sure we know the full effects on longer term food supply. If China were to move on Taiwan then you have even bigger issues. Even apart from that companies are starting to modify their supply chains based on geopolitics which could cause further disruptions.

Longer term demographically developed countries are aging and the workforce is stagnating or even declining. New leaked data out of China indicate they may already be significantly declining population and have been exaggerating their population numbers.

Obviously a lot of things can happen and there still could be some longer term countervailing forces, but it isn’t hard at all to see a longer term above average inflationary environment.
And the longer the inflation persists, the more engrained inflationary psychology will become, and the harder it will be to bring inflation down.

This isn't some cockeyed theory from left-field, and it isn't controversial off this forum. Heck, it was in the WSJ two weeks ago and Barron's back in April.
I am curious.
Just a few months a go, you updated your retirement plans to use 5% WR (i assume real), and a forecast portfolio of $1m (again in real terms) in 3ish years, if i recall correctly.
Now that you think we will have endless stagflation (ok, perhaps i am being a bit hyperbolic, but you get my point), are you making any changes to you plans to account for that coming destruction in purchasing power?
Once in a while you get shown the light, in the strangest of places if you look at it right.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by willthrill81 »

JBTX wrote: Mon Jul 25, 2022 12:20 am I think the tendency is to assume things will return to “normal” as we experienced the prior 30 years or so. But it may well be that was an exceptional period. We are now leaving a unipolar world and becoming a multipolar world and some of the trends that were tail winds to economic growth, low prices, etc may be exhausting or reversing entirely. We tend to look at Covid or Ukraine situation as exceptions but such scenarios may become the new normal.
Yes, normalcy bias can be very strong. I suspect that it was largely responsible for much of the 'transitory inflation' we were hearing about last year, and yes, even the Fed can be afflicted by this bias. Some erroneously believe that groups are less likely to biased than individuals, but they can be even more biased. A conspiracy theorist could make an easy argument that the Fed was only saying that to try to stave off inflationary psychology for as long as possible.

Aside from that, I think that Grantham's thoughts are at the very least interesting, and they seem to largely be in line with those of Todd Tresidder, the retired hedge fund manager that runs the Financial Mentor website. He's been saying that 'epochal change' was coming to the stock and bond markets since early 2021, IIRC, and has laid out several macro factors underpinning it, though I won't get into them here, partly because I don't know that it would be in keeping with forum rules.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by marcopolo »

willthrill81 wrote: Sun Jul 24, 2022 11:59 pm
marcopolo wrote: Sun Jul 24, 2022 10:24 pm
willthrill81 wrote: Sun Jul 24, 2022 8:11 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 8:06 pm
willthrill81 wrote: Sun Jul 24, 2022 8:01 pm

Perhaps I'm wrong, but even if all the supply chain problems were immediately resolved and things were back to where they were in late 2019 (another pipe dream), I don't think that inflation would immediately drop to 2% annualized. Inflationary psychology would seemingly prevent that or anything akin to it.
I didn’t say inflation was going to immediately drop to 2%. All we need is for things to moderate since the economy is actually in pretty good shape, all things considered. As I said further up thread, if I had no investments to view or access to the news and my only gauge was my business, I’d guess we are basically in a massive expansion. That said the business did remarkably well during the GFC, so perhaps I’m the last person to listen to.
Seemingly strong economies are part of the problem though. Once the inflationary psychology sets in, everyone wants to buy NOW before prices increase even further. A box of cereal has a lot better return than Treasuries right now. Historically, about the only way that the inflation can be reined in is by sending the economy into a recession. I'm not aware of any macro-level instances where a ready supply of goods and services alone brought inflation down from being 'high' to 'low'.

Perhaps you're in an insulated business/sector/physical area. If so, count your blessings. :D
How many instances have you observed where the global supply chain was brought to a grinding halt for a year or more?

Do you expect auto dealers to keep prices $5k+ above MSRP, even after the chip shortages resolve and autos are plentiful on the lot, for example.

Have the laws of supply and demand been repealed?
Was there a sudden spike in food demand starting last year? Was there a major famine in the U.S.?
No. But, there was a reduction in worldwide supply of food and energy supplies (which greatly affect food prices) due to the Russia/Ukraine.
Perhaps, there is indeed too much momentum in inflation to roll it back now, but I do believe it is mostly caused by supply side issues. Unfortunately, those don't seem on path to resolve any time soon. So, higher than normal inflation is probably with us for a while. But, i do see a lot of signs that it may have peaked, so at least it may not be accelerating much longer.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by willthrill81 »

marcopolo wrote: Mon Jul 25, 2022 12:29 am
willthrill81 wrote: Mon Jul 25, 2022 12:05 am
JBTX wrote: Mon Jul 25, 2022 12:01 am
marcopolo wrote: Sun Jul 24, 2022 10:24 pm
willthrill81 wrote: Sun Jul 24, 2022 8:11 pm

Seemingly strong economies are part of the problem though. Once the inflationary psychology sets in, everyone wants to buy NOW before prices increase even further. A box of cereal has a lot better return than Treasuries right now. Historically, about the only way that the inflation can be reined in is by sending the economy into a recession. I'm not aware of any macro-level instances where a ready supply of goods and services alone brought inflation down from being 'high' to 'low'.

Perhaps you're in an insulated business/sector/physical area. If so, count your blessings. :D
How many instances have you observed where the global supply chain was brought to a grinding halt for a year or more?

Do you expect auto dealers to keep prices $5k+ above MSRP, even after the chip shortages resolve and autos are plentiful on the lot, for example.

Have the laws of supply and demand been repealed?
There are interim lots full of new cars still awaiting chips more than 2 years later. You still have variants of Covid going around and China has repeatedly incurred shut downs. There are still commodity shortages and interruptions for Ukraine war, and if fully enacted in coming months the next wave of sanctions could have significant energy price shocks. I am not sure we know the full effects on longer term food supply. If China were to move on Taiwan then you have even bigger issues. Even apart from that companies are starting to modify their supply chains based on geopolitics which could cause further disruptions.

Longer term demographically developed countries are aging and the workforce is stagnating or even declining. New leaked data out of China indicate they may already be significantly declining population and have been exaggerating their population numbers.

Obviously a lot of things can happen and there still could be some longer term countervailing forces, but it isn’t hard at all to see a longer term above average inflationary environment.
And the longer the inflation persists, the more engrained inflationary psychology will become, and the harder it will be to bring inflation down.

This isn't some cockeyed theory from left-field, and it isn't controversial off this forum. Heck, it was in the WSJ two weeks ago and Barron's back in April.
I am curious.
Just a few months a go, you updated your retirement plans to use 5% WR (i assume real), and a forecast portfolio of $1m (again in real terms) in 3ish years, if i recall correctly.
Now that you think we will have endless stagflation (ok, perhaps i am being a bit hyperbolic, but you get my point), are you making any changes to you plans to account for that coming destruction in purchasing power?
No, I haven't adjusted my own plans, and no, I don't think that we'll have 'endless stagflation'.

As you know well, I don't practice buy-and-hold, so my wagon isn't hitched to the same fate as those of the markets, for better or worse. No further comment on that.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by marcopolo »

willthrill81 wrote: Mon Jul 25, 2022 12:35 am
JBTX wrote: Mon Jul 25, 2022 12:20 am I think the tendency is to assume things will return to “normal” as we experienced the prior 30 years or so. But it may well be that was an exceptional period. We are now leaving a unipolar world and becoming a multipolar world and some of the trends that were tail winds to economic growth, low prices, etc may be exhausting or reversing entirely. We tend to look at Covid or Ukraine situation as exceptions but such scenarios may become the new normal.
Yes, normalcy bias can be very strong. I suspect that it was largely responsible for much of the 'transitory inflation' we were hearing about last year, and yes, even the Fed can be afflicted by this bias. Some erroneously believe that groups are less likely to biased than individuals, but they can be even more biased. A conspiracy theorist could make an easy argument that the Fed was only saying that to try to stave off inflationary psychology for as long as possible.

Aside from that, I think that Grantham's thoughts are at the very least interesting, and they seem to largely be in line with those of Todd Tresidder, the retired hedge fund manager that runs the Financial Mentor website. He's been saying that 'epochal change' was coming to the stock and bond markets since early 2021, IIRC, and has laid out several macro factors underpinning it, though I won't get into them here, partly because I don't know that it would be in keeping with forum rules.
Recency bias also seems to be at play to a certain degree.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by willthrill81 »

marcopolo wrote: Mon Jul 25, 2022 12:35 am
willthrill81 wrote: Sun Jul 24, 2022 11:59 pm Was there a sudden spike in food demand starting last year? Was there a major famine in the U.S.?
No. But, there was a reduction in worldwide supply of food and energy supplies (which greatly affect food prices) due to the Russia/Ukraine.
Perhaps, there is indeed too much momentum in inflation to roll it back now, but I do believe it is mostly caused by supply side issues. Unfortunately, those don't seem on path to resolve any time soon. So, higher than normal inflation is probably with us for a while. But, i do see a lot of signs that it may have peaked, so at least it may not be accelerating much longer.
I truly hope that inflation will come down soon, but I've been hearing similar comments since early 2021, and yet here we are with the latest CPI numbers at their ATH in 40+ years. Inflation will fall, and the markets will recover, but nobody knows how long either will take.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by marcopolo »

willthrill81 wrote: Mon Jul 25, 2022 12:36 am
marcopolo wrote: Mon Jul 25, 2022 12:29 am
willthrill81 wrote: Mon Jul 25, 2022 12:05 am
JBTX wrote: Mon Jul 25, 2022 12:01 am
marcopolo wrote: Sun Jul 24, 2022 10:24 pm

How many instances have you observed where the global supply chain was brought to a grinding halt for a year or more?

Do you expect auto dealers to keep prices $5k+ above MSRP, even after the chip shortages resolve and autos are plentiful on the lot, for example.

Have the laws of supply and demand been repealed?
There are interim lots full of new cars still awaiting chips more than 2 years later. You still have variants of Covid going around and China has repeatedly incurred shut downs. There are still commodity shortages and interruptions for Ukraine war, and if fully enacted in coming months the next wave of sanctions could have significant energy price shocks. I am not sure we know the full effects on longer term food supply. If China were to move on Taiwan then you have even bigger issues. Even apart from that companies are starting to modify their supply chains based on geopolitics which could cause further disruptions.

Longer term demographically developed countries are aging and the workforce is stagnating or even declining. New leaked data out of China indicate they may already be significantly declining population and have been exaggerating their population numbers.

Obviously a lot of things can happen and there still could be some longer term countervailing forces, but it isn’t hard at all to see a longer term above average inflationary environment.
And the longer the inflation persists, the more engrained inflationary psychology will become, and the harder it will be to bring inflation down.

This isn't some cockeyed theory from left-field, and it isn't controversial off this forum. Heck, it was in the WSJ two weeks ago and Barron's back in April.
I am curious.
Just a few months a go, you updated your retirement plans to use 5% WR (i assume real), and a forecast portfolio of $1m (again in real terms) in 3ish years, if i recall correctly.
Now that you think we will have endless stagflation (ok, perhaps i am being a bit hyperbolic, but you get my point), are you making any changes to you plans to account for that coming destruction in purchasing power?
No, I haven't adjusted my own plans, and no, I don't think that we'll have 'endless stagflation'.

As you know well, I don't practice buy-and-hold, so my wagon isn't hitched to the same fate as those of the markets, for better or worse. No further comment on that.
Does trend following somehow mitigate decades of stagflation?
Did unemployment go above its moving average?
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by JBTX »

willthrill81 wrote: Mon Jul 25, 2022 12:35 am
JBTX wrote: Mon Jul 25, 2022 12:20 am I think the tendency is to assume things will return to “normal” as we experienced the prior 30 years or so. But it may well be that was an exceptional period. We are now leaving a unipolar world and becoming a multipolar world and some of the trends that were tail winds to economic growth, low prices, etc may be exhausting or reversing entirely. We tend to look at Covid or Ukraine situation as exceptions but such scenarios may become the new normal.
Yes, normalcy bias can be very strong. I suspect that it was largely responsible for much of the 'transitory inflation' we were hearing about last year, and yes, even the Fed can be afflicted by this bias. Some erroneously believe that groups are less likely to biased than individuals, but they can be even more biased. A conspiracy theorist could make an easy argument that the Fed was only saying that to try to stave off inflationary psychology for as long as possible.

Aside from that, I think that Grantham's thoughts are at the very least interesting, and they seem to largely be in line with those of Todd Tresidder, the retired hedge fund manager that runs the Financial Mentor website. He's been saying that 'epochal change' was coming to the stock and bond markets since early 2021, IIRC, and has laid out several macro factors underpinning it, though I won't get into them here, partly because I don't know that it would be in keeping with forum rules.
One take could be that Grantham, while good at least identifying certain trends or excesses, really largely missed the impacts of macro trends of post 1990, such as continual lowering of inflation and interest rates, and all of the things that caused those things. But now if those trends are coming to an end, he may actually end up being more correct going forward. I’m not predicting he will or won’t but it is a possibility.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by jarjarM »

JBTX wrote: Mon Jul 25, 2022 12:28 am
marcopolo wrote: Mon Jul 25, 2022 12:17 am
JBTX wrote: Mon Jul 25, 2022 12:01 am
marcopolo wrote: Sun Jul 24, 2022 10:24 pm
willthrill81 wrote: Sun Jul 24, 2022 8:11 pm

Seemingly strong economies are part of the problem though. Once the inflationary psychology sets in, everyone wants to buy NOW before prices increase even further. A box of cereal has a lot better return than Treasuries right now. Historically, about the only way that the inflation can be reined in is by sending the economy into a recession. I'm not aware of any macro-level instances where a ready supply of goods and services alone brought inflation down from being 'high' to 'low'.

Perhaps you're in an insulated business/sector/physical area. If so, count your blessings. :D
How many instances have you observed where the global supply chain was brought to a grinding halt for a year or more?

Do you expect auto dealers to keep prices $5k+ above MSRP, even after the chip shortages resolve and autos are plentiful on the lot, for example.

Have the laws of supply and demand been repealed?
There are interim lots full of new cars still awaiting chips more than 2 years later. You still have variants of Covid going around and China has repeatedly incurred shut downs. There are still commodity shortages and interruptions for Ukraine war, and if fully enacted in coming months the next wave of sanctions could have significant energy price shocks. I am not sure we know the full effects on longer term food supply. If China were to move on Taiwan then you have even bigger issues. Even apart from that companies are starting to modify their supply chains based on geopolitics which could cause further disruptions.

Longer term demographically developed countries are aging and the workforce is stagnating or even declining. New leaked data out of China indicate they may already be significantly declining population and have been exaggerating their population numbers.

Obviously a lot of things can happen and there still could be some longer term countervailing forces, but it isn’t hard at all to see a longer term above average inflationary environment.
I largely agree with most of what you are saying.

Most of those things are supply side issues, which is the point I was making. See the text I bolded that I was responding to.
I think his point was even after supply side issues are resolved, by that time inflation has momentum and doesn’t just quickly reverse. From my perspective this all started with supply side issues coupled with unprecedented demand side stimulus leading to inflation, followed by more unexpected supply side issues and the prospect of some longer term supply side issues such as labor. The demand side issues may be working themselves out to a degree but still remain, and at this point regardless inflationary expectations are baked in and it becomes similar to physics - once a body is in motion it tends to stay in motion.
Won't recession serves as a good way to slow down that body in motion? Unfortunately, I too agree that we're entering a new economic reality that's going to be different than the previous 40 years of relative peace, prosperity and globalization that really drives down the inflation. However, my crystal ball isn't clear enough to see how the next 20 years will play out so maybe permanent portfolio is the way to go???
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by willthrill81 »

jarjarM wrote: Mon Jul 25, 2022 1:24 am
JBTX wrote: Mon Jul 25, 2022 12:28 am
marcopolo wrote: Mon Jul 25, 2022 12:17 am
JBTX wrote: Mon Jul 25, 2022 12:01 am
marcopolo wrote: Sun Jul 24, 2022 10:24 pm

How many instances have you observed where the global supply chain was brought to a grinding halt for a year or more?

Do you expect auto dealers to keep prices $5k+ above MSRP, even after the chip shortages resolve and autos are plentiful on the lot, for example.

Have the laws of supply and demand been repealed?
There are interim lots full of new cars still awaiting chips more than 2 years later. You still have variants of Covid going around and China has repeatedly incurred shut downs. There are still commodity shortages and interruptions for Ukraine war, and if fully enacted in coming months the next wave of sanctions could have significant energy price shocks. I am not sure we know the full effects on longer term food supply. If China were to move on Taiwan then you have even bigger issues. Even apart from that companies are starting to modify their supply chains based on geopolitics which could cause further disruptions.

Longer term demographically developed countries are aging and the workforce is stagnating or even declining. New leaked data out of China indicate they may already be significantly declining population and have been exaggerating their population numbers.

Obviously a lot of things can happen and there still could be some longer term countervailing forces, but it isn’t hard at all to see a longer term above average inflationary environment.
I largely agree with most of what you are saying.

Most of those things are supply side issues, which is the point I was making. See the text I bolded that I was responding to.
I think his point was even after supply side issues are resolved, by that time inflation has momentum and doesn’t just quickly reverse. From my perspective this all started with supply side issues coupled with unprecedented demand side stimulus leading to inflation, followed by more unexpected supply side issues and the prospect of some longer term supply side issues such as labor. The demand side issues may be working themselves out to a degree but still remain, and at this point regardless inflationary expectations are baked in and it becomes similar to physics - once a body is in motion it tends to stay in motion.
Won't recession serves as a good way to slow down that body in motion? Unfortunately, I too agree that we're entering a new economic reality that's going to be different than the previous 40 years of relative peace, prosperity and globalization that really drives down the inflation. However, my crystal ball isn't clear enough to see how the next 20 years will play out so maybe permanent portfolio is the way to go???
Yes, a recession will likely be necessary to 'break the back' of the existing inflation. The Fed clearly doesn't want it to go that far, though the existing interest rate increases haven't yet turned the tide as measured by CPI, which is at its highest level in 40+ years.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by HomerJ »

Lot of interesting discussion on whether or not the economy/market is going to crash or recover...

I just want to point out when I say don't listen to Grantham, I'm NOT taking the opposite position... I am NOT claiming the market will recover in a few months.

I'm NOT saying he's wrong this time...

I'm saying he doesn't know. And one should make no changes to their portfolio based on his writings and predictions.

He's been wrong for years and years. Just 2 years ago, he suggested 0% stocks, or even shorting the U.S. market... He was warning in 2010 that valuations were too high.

Making changes to your portfolio based on Grantham in the past would have made one far poorer.

This is without dispute. The historical record is clear.

We joke that "Nobody knows nothing"... Not the most accurate phrase (I prefer Nobody knows enough), but the point is clear...

Nobody can predict the future... there are too many variables
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by alluringreality »

HomerJ wrote: Mon Jul 25, 2022 10:09 am He was warning in 2010 that valuations were too high.
My impression is that his perspective could be summarized as a preference for his opinion about value. He appears to operate under the following assumption. Ultimately a cheap asset might prove to be tomorrow's darling, or assets may simply be inexpensive for a reason. Basically the following is simply a different take on investing than the general direction John Bogle encouraged.

You don't get rewarded for taking risk; you get rewarded for buying cheap assets.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Elysium »

Grantham in that forecast also predicted Emerging Markets would perform well, but they haven't. EM has been equally bad as US. Another area he predicted will do well is Japan Value, don't think that is working out either. So, overall still not very good forecasts.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Taylor Larimore »

Bogleheads:

I have learned that I don't know what the stock (and bond) market will do tomorrow, next week, next month or next year.

I simply stay-the-course. It has worked well. For example, I started investing in 1950 at my age of 26. According to the "Stock Trader's Almanac" the S&P 500 price was 20.41 on December 1950. Today it is nearly 4,000.00 (not including dividends).

Lesson learned: If we had simply invested in the S&P 500 stocks and done nothing, I would be much richer today.

Best wishes.
Taylor
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by willthrill81 »

HomerJ wrote: Mon Jul 25, 2022 10:09 am Lot of interesting discussion on whether or not the economy/market is going to crash or recover...

I just want to point out when I say don't listen to Grantham, I'm NOT taking the opposite position... I am NOT claiming the market will recover in a few months.

I'm NOT saying he's wrong this time...

I'm saying he doesn't know. And one should make no changes to their portfolio based on his writings and predictions.

He's been wrong for years and years. Just 2 years ago, he suggested 0% stocks, or even shorting the U.S. market... He was warning in 2010 that valuations were too high.

Making changes to your portfolio based on Grantham in the past would have made one far poorer.

This is without dispute. The historical record is clear.

We joke that "Nobody knows nothing"... Not the most accurate phrase (I prefer Nobody knows enough), but the point is clear...

Nobody can predict the future... there are too many variables
It's true that neither Grantham nor anyone else knows with certainty what the future will bring.

A big part of the problem at stake here is that possible outcomes in every sphere of life are probabilistic, and investing is no different. We may think that there's a very high probability of X event occurring, but the probability is never 100%. If someone says that they know with 100% certainty what will happen in the future, that recommendation at least should be disregarded, and it makes the rest of their advice at least somewhat suspect.

However, it's fairly rare for someone in the investing world to say 'I believe that there is X probability of Y event occurring, Z probability of A event occurring, etc.'. Most of the time, the best that people will do is make much less specific statements like 'Y event is more likely than A event', and I'm guilty of this myself. Part of the reason is almost certainly that we inherently understand that we cannot estimate these probabilities with great precision. That doesn't invalidate the process though. After all, we have to make such decisions every time we get behind the wheel of a vehicle, and the overwhelming majority of the time, we manage to do that just fine.

Given that we should think of future possibilities in probabilistic terms, it can be exceedingly difficult to say that a given statement was wrong if it was couched in probabilistic terms. For instance, if a statement says that 'there is a 70% probability of X event occurring' and it doesn't occur, it doesn't mean that the statement was false because there was a 30% probability of that happening. Many such statements must typically be evaluated before we can have a reasonable degree of confidence that the person making them was more accurate than random chance, but even then, we can never be certain. This is why it's literally impossible for statistics to prove anything.

Regarding the statement that 'nobody can predict the future', that's accurate in the sense described above that nobody knows with 100% certainty what will happen. But it's inaccurate in the sense that we have no knowledge of the probabilities of any future events, and literally nobody lives that way because it would be impossible to do so. I know that you understand this, but it should be clarified for the benefit of others.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by HomerJ »

My point of view is that one can't even calculate the probabilities very well. I mean you can't even tell if it's closer to 70% or 40%.

Not enough data points, too many variables, changing laws and trade rules, even human emotions are involved.

I can't prove it's impossible, but some predictions are so far off, it seems to validate my view.

Cliff Asness, investing genius, Phd, billionaire, predicted 1% real 10-year returns in 2012 based on valuations... He hedged the prediction by giving it a range of -4.4% to 8.3%...

This was all correct based on the data he had at the time... 8.3% was the BEST 10-year return at the time starting from the valuations in 2012... He stated the odds of repeating the best period in history were obviously low...

And then we got like 10%-11% real from 2012-2022 instead.

That's not just a little bit off.. that's a 3 sigma event.

Now it still is possible that maybe we just hit the 0.5% chance and the model is still correct...

But it is also very reasonable to wonder if maybe, just maybe, the model is wrong, because a few variables have changed, and one can't predict the probabilities...

I could be wrong, but I believe my lack of faith in these models is reasonable

I will say for sure though that other people should not be stating, with strong certainty, that the models are accurate after the poor real world results... they can still believe in them, they can give us explanations why the results have been poor, but far too many will just state that the models have worked great, and that is false.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by willthrill81 »

HomerJ wrote: Mon Jul 25, 2022 12:01 pm My point of view is that one can't even calculate the probabilities.

Not enough data points, too many variables, changing laws and trade rules, even human emotions are involved.

I can't prove it's impossible, but some predictions are so far off, it seems to validate my view.

Cliff Asness, investing genius, Phd, billionaire, predicted 1% real 10-year returns in 2012 based on valuations... He hedged the prediction by giving it a range of -4.4% to 8.3%...

This was all correct based on the data he had at the time... 8.3% was the BEST 10-year return at the time starting from the valuations in 2012... He stated the odds of repeating the best period in history were obviously low...

And then we got like 10%-11% real from 2012-2022 instead.

That's not just a little bit off.. that's a 3 sigma event.

Now it still is possible that maybe we just hit the 0.5% chance and the model is still correct...

But it is also very reasonable to wonder if maybe, just maybe, the model is wrong, because a few variables have changed, and one can't predict the probabilities...

I could be wrong, but I believe my lack of faith in these models is reasonable

I will say for sure though that other people should not be stating, with strong certainty, that the models are accurate after the poor real world results... they can still believe in them, they can give us explanations why the results have been poor, but far too many will just state that the models have worked great, and that is false.
I don't disagree with any of that. At a minimum, bobody cannot calculate the probabilities with great precision. Whether there is enough precision to be actionable and what types of actions should be taken depends on many things and is ultimately something that investors have to determine for themselves.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Wanderingwheelz »

willthrill81 wrote: Sun Jul 24, 2022 8:38 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 8:27 pm
willthrill81 wrote: Sun Jul 24, 2022 8:11 pm
Wanderingwheelz wrote: Sun Jul 24, 2022 8:06 pm
willthrill81 wrote: Sun Jul 24, 2022 8:01 pm

Perhaps I'm wrong, but even if all the supply chain problems were immediately resolved and things were back to where they were in late 2019 (another pipe dream), I don't think that inflation would immediately drop to 2% annualized. Inflationary psychology would seemingly prevent that or anything akin to it.
I didn’t say inflation was going to immediately drop to 2%. All we need is for things to moderate since the economy is actually in pretty good shape, all things considered. As I said further up thread, if I had no investments to view or access to the news and my only gauge was my business, I’d guess we are basically in a massive expansion. That said the business did remarkably well during the GFC, so perhaps I’m the last person to listen to.
Seemingly strong economies are part of the problem though. Once the inflationary psychology sets in, everyone wants to buy NOW before prices increase even further. A box of cereal has a lot better return than Treasuries right now. Historically, about the only way that the inflation can be reined in is by sending the economy into a recession. I'm not aware of any macro-level instances where a ready supply of goods and services alone brought inflation down from being 'high' to 'low'.

Perhaps you're in an insulated business/sector/physical area. If so, count your blessings. :D
After the last 30 months or so, why would anyone expect what’s coming to resemble anything that’s happened before?
So, it's different this time? Where have I heard that before... :wink:
Wanderingwheelz wrote: Sun Jul 24, 2022 8:27 pm I agree that a strong economy is something we’ve been led to believe is a problem. Not everyone is on a salary though. I’m perfect happy to pay 42 cents more for a bag of corn chips if it means that my business can do 30% more revenue than what would happen if the fed destroys the economy.
Overheated economies seem good but aren't.
An overheated economy is when the economy grows too fast. An overheated economy reaches the limits of how much output it can produce to meet the demand from consumers and businesses, as there are very little unused resources. This typically occurs when the economy is employed beyond what is considered “full employment.”
https://www.thebalance.com/overheated-economy-5214761

That sure seems to describe what we're seeing now. And, if so, there's only been one consistent solution: tighten monetary policy.
Wanderingwheelz wrote: Sun Jul 24, 2022 8:27 pm I’m not quite ready to shift my bond allocation to Lucky Charms and Cinnamon Toast Crunch, but I appreciate the tip.
No prob. :beer
Just now: (Bloomberg) -- Walmart Inc. cut its earnings guidance for the second quarter and full year, citing the need to lower prices to clear out bloated inventories.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by willthrill81 »

Wanderingwheelz wrote: Mon Jul 25, 2022 3:55 pm Just now: (Bloomberg) -- Walmart Inc. cut its earnings guidance for the second quarter and full year, citing the need to lower prices to clear out bloated inventories.
We'll see if others follow suit. I certainly hope so. Inflation hasn't been kind to us.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by CraigTester »

As agreed, I’m continuing to use this thread as an audit trail as Jeremy provides updates along the way to his bubble call.

https://youtu.be/OCUeKnAQVjc
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by InvestInPasta »

CraigTester wrote: Wed Aug 03, 2022 9:33 pm As agreed, I’m continuing to use this thread as an audit trail as Jeremy provides updates along the way to his bubble call.

https://youtu.be/OCUeKnAQVjc
I wish a huge bear market would really start to see when Jeremy will say that it's time to buy the SP500.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by CraigTester »

InvestInPasta wrote: Sat Aug 13, 2022 6:37 pm
CraigTester wrote: Wed Aug 03, 2022 9:33 pm As agreed, I’m continuing to use this thread as an audit trail as Jeremy provides updates along the way to his bubble call.

https://youtu.be/OCUeKnAQVjc
I wish a huge bear market would really start to see when Jeremy will say that it's time to buy the SP500.
That’s why I’m keeping this audit trail going….

He has been bullish before….but definitely not now…

Below is the latest.


https://markets.businessinsider.com/new ... pto-2022-8
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by HomerJ »

CraigTester wrote: Wed Aug 03, 2022 9:33 pm As agreed, I’m continuing to use this thread as an audit trail as Jeremy provides updates along the way to his bubble call.
Who agreed?

Also I hate video... If you want update the thread, update the thread.... What is Grantham saying now?
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by HomerJ »

CraigTester wrote: Sat Aug 13, 2022 8:34 pm
InvestInPasta wrote: Sat Aug 13, 2022 6:37 pm
CraigTester wrote: Wed Aug 03, 2022 9:33 pm As agreed, I’m continuing to use this thread as an audit trail as Jeremy provides updates along the way to his bubble call.

https://youtu.be/OCUeKnAQVjc
I wish a huge bear market would really start to see when Jeremy will say that it's time to buy the SP500.
That’s why I’m keeping this audit trail going….

He has been bullish before….but definitely not now…

Below is the latest.


https://markets.businessinsider.com/new ... pto-2022-8
Better... at least I can read that...

I agree with most of it actually, except he has no idea if we're in a bear-market rally, or if the bear market is over. No one does.

As far as an audit trail, we already have an audit of Grantham over the years. He's been mostly wrong.

This is not in dispute. The Internet has all his past predictions. He's proven he can't predict the future. Even if he gets this call right, it's too late. He's already proven he doesn't know enough to accurately make market calls.
"The best tools available to us are shovels, not scalpels. Don't get carried away." - vanBogle59
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CraigTester
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by CraigTester »

Keeping the Jeremy audit trail going….

Below is the Fortune version of his latest update ….,

Similar articles were also reported in WSJ, Bloomberg, CNBC, Marketwatch, Seeking Alpha and others today.

https://fortune.com/2022/08/31/jeremy-g ... opped-yet/

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Beensabu
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Beensabu »

That's a fluffy article.

Same deal as always. "Here is why doom is bound to happen!" Sure, makes sense. Some elaboration of those most interesting bits would be nice, but is totally not necessary since I can go find something Grantham's written himself if I truly wish to be entertained. Everyone prepare for doom! "But it might not!" What? But... doom? "And if it does, then perhaps it will be only doom-ish rather than DOOM." Cool. Prepare for possible doom-ish-ness after either this most recent or some other rally that occurs during this technically still a bear market thing that's happening, those who wish to do so.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
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CraigTester
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by CraigTester »

Beensabu wrote: Wed Aug 31, 2022 11:12 pm That's a fluffy article.

Same deal as always. "Here is why doom is bound to happen!" Sure, makes sense. Some elaboration of those most interesting bits would be nice, but is totally not necessary since I can go find something Grantham's written himself if I truly wish to be entertained. Everyone prepare for doom! "But it might not!" What? But... doom? "And if it does, then perhaps it will be only doom-ish rather than DOOM." Cool. Prepare for possible doom-ish-ness after either this most recent or some other rally that occurs during this technically still a bear market thing that's happening, those who wish to do so.
FYI, You can click the research note link in the article if you want his own words….
dertere
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by dertere »

The current superbubble features an unprecedentedly dangerous mix of cross-asset overvaluation (with bonds, housing, and stocks all critically overpriced and now rapidly losing momentum), commodity shock, and Fed hawkishness. Each cycle is different and unique – but every historical parallel suggests that the worst is yet to come.
Curious if anyone has insight into what is meant about bonds being over-priced here? I skimmed through the research note but I didn't see anything specific concerning bonds beyond this language in the opening. I'm assuming Grantham thinks that investors should be pricing in more severe interest rate hikes then they currently are, but it would be nice to have something backing up that "critically overpriced" language. Is the bond market supposed to be at the same 3 sigma level as the stock market? Should we expect a level of pain similar to the price declines over the past year, or should we expect that the worst is yet to come?
If the bear market has already ended, the parallels with the three other U.S. superbubbles – so far so strangely in line – would be completely broken. This is always possible. Each cycle is different, and each government response is unpredictable. But these few epic events seem to act according to their very own rules, in their own play, which has apparently just paused between the third and final act. If history repeats, the play will once again be a Tragedy. We must hope this time for a minor one.
It seems like Grantham and I fall back on the same level of hedging. I guess both government employees and gurus live by the same rule, if you ever say anything definitive you are only giving people a weapon to use against you.
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Beensabu »

CraigTester wrote: Thu Sep 01, 2022 9:09 am
Beensabu wrote: Wed Aug 31, 2022 11:12 pm That's a fluffy article.

Same deal as always. "Here is why doom is bound to happen!" Sure, makes sense. Some elaboration of those most interesting bits would be nice, but is totally not necessary since I can go find something Grantham's written himself if I truly wish to be entertained. Everyone prepare for doom! "But it might not!" What? But... doom? "And if it does, then perhaps it will be only doom-ish rather than DOOM." Cool. Prepare for possible doom-ish-ness after either this most recent or some other rally that occurs during this technically still a bear market thing that's happening, those who wish to do so.
FYI, You can click the research note link in the article if you want his own words….
Thank you! Of course I want his own words! He's a fantastic writer.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
forwhatiknow
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by forwhatiknow »

With J Grantham's insight and the current" Rule of 20" ,PE ratio added to the current inflation number, it has me in a state of real concern as to whether this is a time for being long .
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Harmanic »

dertere wrote: Thu Sep 01, 2022 10:36 am Curious if anyone has insight into what is meant about bonds being over-priced here? I skimmed through the research note but I didn't see anything specific concerning bonds beyond this language in the opening. I'm assuming Grantham thinks that investors should be pricing in more severe interest rate hikes then they currently are, but it would be nice to have something backing up that "critically overpriced" language. Is the bond market supposed to be at the same 3 sigma level as the stock market? Should we expect a level of pain similar to the price declines over the past year, or should we expect that the worst is yet to come?
You cannot tame inflation until real rates are positive. That means more rate hikes are needed even though bonds are priced for continued low interest rates. Therefore, they are likely significantly overvalued. That's the logic, anyway. Let's see if it actually plays out that way.
The question isn't at what age I want to retire, it's at what income. | - George Foreman
Harmanic
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Re: Jeremy Grantham (Jan 26, 2022) being asked a lot of tough questions about his super bubble call...

Post by Harmanic »

HomerJ wrote: Sat Aug 13, 2022 9:46 pm
CraigTester wrote: Wed Aug 03, 2022 9:33 pm As agreed, I’m continuing to use this thread as an audit trail as Jeremy provides updates along the way to his bubble call.
Who agreed?

Also I hate video... If you want update the thread, update the thread.... What is Grantham saying now?
No mention of EM in his latest report. EM has been his siren call for years and he said he invested all his sister's money in EM. Now that EM has far underperformed, crickets.
The question isn't at what age I want to retire, it's at what income. | - George Foreman
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