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Ready For A 50% Stock Market Collapse, Investing Legend Warns Of Most Critical Time Of Your Life!

Jan 21, 2022

The Fed and other central banks went all in on stabilizing the market, resulting in an epic year for risk assets which closed 2021 at all time highs

But with stocks again swooning on fears Fed support of gradually fading, it didn’t take long for the 83-year-old Grantham to publish his most apocalyptic note yet, “Let The Wild Rumpus Begin” out this morning, in which he revisits the familiar them that we are currently living in a superbubble -only the fourth of the past century –

And like the crash of 1929, the dot-com bust of 2000 and the financial crisis of 2008, Grantham is “nearly certain” the bursting of this bubble has begun, sending indexes back to statistical norms and possibly further.

The iconic value manager sees the S&P tumbling by nearly 50% to 2,500 from its all time highs of 4,800 just a few weeks ago.

The Nasdaq Composite, which closed in a technical correction on Wednesday down 10% from its all time high, may sustain an even bigger correction.

 

“I wasn’t quite as certain about this bubble a year ago as I had been about the tech bubble of 2000, or as I had been in Japan, or as I had been in the housing bubble of 2007,” Grantham told Bloomberg in a “Front Row” interview.

 

“I felt highly likely, but perhaps not nearly certain. Today, I feel it is just about nearly certain.”

 

The signs that Grantham has been looking at are hardly a secret: the first indication that the bursting of the superbubble has begun came last February, when dozens of the most speculative stocks began falling.

 

One proxy, Cathie Wood’s ARK Innovation ETF, has since tumbled by 52%. Next, the Russell 2000, an index of mid-cap equities that typically outperforms in a bull market, trailed the S&P 500 in 2021.

 

Indeed, many of the bubble baskets which are a proxy of central bank liquidity, have been sharply lower for the past year with a handful of exceptions.

 

The iconic value manager sees the S&P tumbling by nearly 50% to 2,500 from its all time highs of 4,800 just a few weeks ago.

 

The Nasdaq Composite, which closed in a technical correction on Wednesday down 10% from its all time high, may sustain an even bigger correction.

 

“I wasn’t quite as certain about this bubble a year ago as I had been about the tech bubble of 2000, or as I had been in Japan, or as I had been in the housing bubble of 2007,” Grantham told Bloomberg in a “Front Row” interview. “I felt highly likely, but perhaps not nearly certain. Today, I feel it is just about nearly certain.”

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