Calling a Super Bubble: Front Row With Jeremy Grantham
It's time to CASH OUT, say's Jeremy Grantham. We have now entered a superbubble in the markets. This man is a legend in the finical markets and has called all significant crises. He stated when the markets reach this amount of craziness; it's only a matter of months before the bubble will break. He compares it to the 1929 crash, where the markets were down 30% before they crashed completely, and we have now hit that exact example of this rare pattern. He believes we are in the buy-the-dip mode now. You will never hear a broker say it's time to cash out because they are there to make money. Where will the markets crash too? He believes it will go-to trend and will drop lower than all other markets around the world. You might want to think about cashing out because after a major crash like a super bubble, it can take 10 to 50 years before the markets will regain their recent highs, and in some cases, like Japan will never get there. So you need to ask yourself is do you have that much time to wait. If you do great, but for someone older, they might not have that option.
The difference between a bubble and a super bubble.
- The bubble is a two sigma statistical event that happens every 35 years and can cause you a 30 to 50% loss.
- Super bubble is a three-sigma statistical event that happens every 100 years that can wipe you out.
Right now, we have entered the superbubble for these reasons.
- US housing is overpriced by 20%.
- Bonds & Stock market overpriced.
- Overpriced commodities.
- Lowest real rates in history
- Higher ratio of debt to GDP.
- More dept on the balance sheet.
There is some excellent conversation about inflation, declining resources, population, climate change, and food shortages in the foreseen future. However, I believe this video is worth watching that might make you re-evaluate your investment positioning and which route you might want to take with the time you may have left here.