Jeremy Grantham, GMO - What Day Is The Highest Level Of Optimism? It’s The Day The Market Hits The Peak | #286
n episode 286, we welcome our guest, Jeremy Grantham, co-founder and Chief Investment Strategist of GMO. In today’s episode, Jeremy begins by talking about the current market, which he believes will be recorded as one of the great bubbles of financial history. He puts this bubble into historical perspective by comparing it to the Japanese, technology and housing bubbles. Then he addresses the commonly cited argument that low interest rates justify high stock valuations. Next, Jeremy explains why he is so bullish on venture capital and has allocated almost 60% of his foundation to the asset class, making it, as he says, one of the most aggressive portfolios in the philanthropic world.
Key Points
- Jeremy Grantham characterizes the current market as one of the great bubbles of financial history, comparing it to historic bubbles like the Japanese bubble, the US technology, and housing bubbles.
- Despite the commonly cited argument that low interest rates justify high stock valuations, Grantham points out that other developed countries with even lower interest rates have much cheaper price-earnings ratios, challenging the sufficiency of the low-interest-rate justification for high US stock prices.
- Grantham expresses a bullish stance on venture capital, allocating most of his foundation to this asset class due to its historical high returns and the potential for significant advancements in green technology and climate change solutions.
Follow Jeremy: Website
Resources: Tirade of A Dinosaur (Kirby) ‘Irrational Exuberance’ — again Stocks Are Allowed To Be Expensive Since Bonds Yields Are Low…Right? (Faber) Reinvesting when Terrified (Grantham) Hussman Funds The General Theory of Employment, Interest, and Money Freakonomics Podcast: Nathan Myhrvold: “I Am Interested in Lots of Things, and That’s Actually a Bad Strategy” Modernist Pizza Time to Wake Up (Grantham) Race of Our Lives Revisited (Grantham) Chemical Toxicity and the Baby Bust (Grantham) The Advent of the Cynical Bubbles (Montier)
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Transcript
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