The legendary investor Jeremy Grantham, the founder of the asset management agency GMO, has repeatedly warned that the US stock bubble is facing a bursting crisis. It is warned that once the bull market bubble bursts, it may collapse by at least 50%.
Graham said in an interview on CNBC on Thursday: “Retail investors have become extremely active… They are borrowing money and trading more stocks.” He pointed out that since last February, over-the-counter (OTC) stocks The number soared to 280 million shares in November and tripled to 1.15 trillion shares in December.
Graham said: “Retail investors are doing their best to put all their cash into the market. We rarely see them so excited.” He specifically pointed outBitcoinThe recent gains have been coupled with the substantial growth of special purpose acquisition companies (SPACs).
Graham warned that there has never been a mega bull market that has fallen less than 50% after the bubble burst. He also believes that the catalyst that triggered the stock market crash is difficult to predict.
“Assuming that people are lucky enough to administer the second dose of the vaccine and continue to promote the stock market bubble. However, the bubble may still burst at a certain point and hit investors when the epidemic situation in various places has not improved significantly.” He said.
Compared with the US market, Graham prefers emerging market assets and is also more interested in cash and US venture capital (Venture Capital).
“Compared with the overpriced US market, the pricing of emerging markets is relatively reasonable.” Graham said that although emerging markets may accompany the decline of the US market, the crash will not be so serious because their prices are relatively cheap.
He also affirmed American venture capital, calling it the strongest and most powerful part of the American capitalist system.
“Most things that happen in the United States today are terrible, except for venture capital.” The U.S. venture capital industry has long dominated the world. In addition to high returns, Graham believes that it will perform better than stocks in the long run. .
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