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Jeremy Grantham Predictions Reviewed

February 20, 2024 by Finance Gourmet

Updated 2/20/24 One year almost to the day, here we are with Jeremey Grantham predicting… wait for it… a bubble! Of course, a bubble. I guess we can call him a permabear now. He must not believe everything he says because his fund is still in business. Maybe he just says these things to get headlines. It works. Updated 02/01/2023 According to a Marketwatch article, “Man credited with calling the 2008 crisis says the next 20 years in the stock market will ‘break a lot of hearts.” Whew. That’s a lot to unpack. Take a closer look at Jeremy Grantham predictions. Let’s start with a 20-year call being virtually worthless. In the next 20 years, I too predict the stock market will have rough periods. I also predict growth, a big year, a terrible year, a sidewise year, and a general overall trend up fueled at some points by growth, and some points by inflation. I mean, seriously, pretty much everything will happen at least once during the next 20 years. Was The Prediction Really That Great? As I pointed out in an earlier article, there is a staggering amount of back-patting, and “See I was right!” when it comes …

Upcoming Correction or Stock Market Crash

September 20, 2021 by Finance Gourmet

Here it comes. No, not the stock market crash. No, not a stock market correction, either. OK. Well, maybe those things are coming. But, what most definitely IS coming are the analysts’ notes, financial stories, and money website articles about a possible 10% correction, or even 20% crash. How To Get Credit For Predicting The Crash You’ve seen the ads a hundred times on the internet. “He predicted the real estate crash, now he recommends this one company!” So, how do you get credit for calling a stock market correction or stock market crash, anyway? The sad reality is that it doesn’t take much. As long as you have some sort of statement, article, analysis, or investor note floating around out there mentioning a crash or correction when one actually happens, you (and your PR department) simply rush out to take credit. Whether the financial media decides to buy it depends a bit on how long ago your “prediction” happened, and how accurate it was. But, as I’ve tried to point out time and again here on Finance Gourmet and other places I do financial writing for, these predictions aren’t always what they are cracked up to be. Often, the …

5 Keys to 2021 Stock Market Predictions

January 7, 2021January 7, 2021 by Finance Gourmet

The 2021 stock market predictions will start flowing from the pens of the financial media as the end of 2020 fades into the background. There can be no question that stocks are pricing in a very happy new year. Does that make it a bubble? I think the better question is to understand what is holding up the market. The following tenants are why this market keeps going higher. If any one of them falls apart, then the market gets on shakier ground, and investors will start looking for an exit, whether in a nice, methodical path, or a bubble-bursting flee for the exits based upon how quickly the pillars crumble. What’s Holding Up The Stock Market? 5 Keys to Stock Market Predictions Low Interest Rates – The irony is that the economy is very shaky, and everyone including the Fed knows it, that’s why interest rates are at zero. These low rates are a key to propping up the market. Coronavirus Improvement – Look, the U.S. can’t do any worse with Covid than it did in 2020. Between the federal government just ignoring the whole thing, and the states opening and closing randomly, the U.S. Covid response was about …

Jeremy Grantham Calls “Epic Bubble”

January 6, 2021 by Finance Gourmet

One of my favorite themes here on Finance Gourmet is accountability. Accountability for your financial advisor, accountability for talking heads on money TV, accountability for analysts making “calls” about the market. Too often, all of these predictions and calls are simply forgotten until one of them is “right” and then, they won’t shut up about it. I try, in my huge amounts of spare time (Hah!) to bring a little bit of accountability to the big names and headlines that fly by. Today, it’s Jeremy Grantham. Epic Bubble Every article with the name Jeremy Grantham in it makes sure to “credit” him with predicting the housing bubble of 2007. Some also credit him with predicting the dot-com bubble of 2009. That’s pretty cool, but it is now 2021. Wondering about the TurboTax card? What has he predicted in the last 11 years? Have any of those predictions been good … or bad? Never mind that, the finance press says. He predicted those two things over a decade ago and now he says, “Epic bubble!” Print it! Jeremy Grantham Track Record First off, let’s give Mr. Grantham some credit. In January 2018, he predicted a “melt-up” in the stock market. He …

Everyone Who Called a Downturn in the First Half of 2019 Is Officially WRONG

October 8, 2019 by Finance Gourmet

It is now October. That is the third quarter of 2019. By any, and all, definitions the first half of 2019 is officially over. That means all of those analysts, pundits, economists, and big Wall Street talking heads who predicted a recession or stock market downturn in the first half of 2019 are officially wrong. They were also wrong about the first three-quarters of 2019, but that headline isn’t as catchy. 🙂 There is nothing wrong with that on the surface. Predictions of any kind are risky business. However, a great many of these same people trade on a weird blindness in the financial industry. No one keeps any real track of these predictions. As a result, if these same people go out and make the exact same prediction for next year, they get full credit in the media for “calling” the next downturn without any acknowledgement that they were wrong this year (and maybe several of the previous years.) Investing By Predictions is Dumb Past performance is not an indicator of future results. This statement is mandated to show up on all kinds of investing materials by regulators. It is a hopeless cry to the masses to not invest …

Abby Joseph Cohen Track Record Accurate As A Broken Indicator Light

November 18, 2020August 9, 2009 by Finance Gourmet

I fired off a quick post yesterday about the “news” that Goldman Sach’s Abby Joseph Cohen declared the recession over. If you missed it, I made the point that an arrow pointing up painted on a wall had just as accurate of a track record as Ms. Cohen did over the past decade or so. For some reason, Cohen has a set of groupies, or fan boys, or whatever that always like to remind people of when she was “right” and, of course, always forget about when she was wrong. The truth is that Abby Joseph Cohen has never been “right”. If your answer to a yes/no question is always the same, you aren’t getting the questions right. You are just happening upon the questions that were written with a yes answer. That isn’t intelligence or ability, that’s statistics. Still, so as to avoid anyone showing up and (publicly, so far, it’s only messages) saying that I have forgotten about all the really great “calls” she has made, I offer the following factual data as proof that any upward pointing arrow would have made, and lost, investors just as much money as Abby Joseph Cohen over the last 10 years. …