Jeremy Grantham – Bubbles, Value Investing, and the Long Game at GMO (EP.493)

Bearish:

• $NVDA - Jeremy believes NVIDIA is in a massive bubble similar to Amazon in 2000, driven by AI investment mania that will inevitably correct sharply despite the technology being transformative.

  • “So here we are with NVIDIA looking like Amazon squared, the money dwarfing any CapEx program in history. Everyone being clear in their mind that this is the biggest thing they've ever had in their lives. And they're right. It is. That's why the investment program is almost certain to be overdone. Why would it not be? Humans being who they are. Why would you not invest more than you should in something this big and this obvious? This is exactly where you'd expect the bubble to break. And you would expect other things being even that it will be led down by Navidea, followed closely by the other giants.”

    Jeremy·0:44
• $EQUITIES - Jeremy believes US stocks are extremely overvalued at 31 times earnings and will inevitably return to historical norms, causing a major bear market.

  • “The US is simply too high priced from top to toe.”

    Jeremy·35:46

  • “There's never been any statistical doubt. That's something nobody ever seems to make much of a fuss about except me.”

    Jeremy·30:22

  • “Every bubble had broken and we drew exhibits of all the top bubbles in currencies, in commodities, in stocks, and bonds. In major countries, there was no exception to the principle that an overpriced market at two sigma, which is just a statistical measure. If you look at the price, you look at the breakout on the upside, if it's two sigma, there is no exception to the rule that all of them went back to the trend that existed prior to the bubble.”

    Jeremy·29:14