Skip to main content

Grantham and Faber on bubbles

Jeremy Grantham's latest commentary to investors at GMO seems to stress the bubble-like atmosphere that's enveloped asset markets across the globe; at least that's what we hear from a number of sources, including John Mauldin and Barry Ritholtz (who might have actually read the thing).

Meanwhile, I can't help but notice that Grantham's observations sound a lot like what we heard from Marc Faber earlier in the year, and as far back as 2006. Let's compare.

Here's Mauldin quoting Grantham:

Grantham says we are now seeing the first worldwide bubble in history covering all asset classes.
"'Everything is in bubble territory,' he says. 'Everything. The bursting of this bubble will be across all countries and all assets.'
"'From Indian antiquities to modern Chinese art,' he wrote in a letter to clients this week following a six-week world tour, 'from land in Panama to Mayfair; from forestry, infrastructure and the junkiest bonds to mundane blue chips; it's bubble time!'

Here's Marc Faber making the same point to Bloomberg earlier in the year, while talking about the easy money conditions that helped bring about the uniform rise in asset markets worldwide:

"Well, I think that the Fed, since June 2004, has increased the Fed Funds rate from 1 percent to 5.25 percent. But money hasn't been tight, because the definition of tight money is that credit/debt...credit market volume, or the debt growth, slows down considerably. That is tight money.

And believe me, when you have tight money the art market doesn't go up by 27 percent like in the US last year. And you don't see new highs in stocks, and you don't see new highs in asset markets like commodities and real estate..."

Since we are fans of both Grantham and Faber, let's just say that great minds think alike (or may at least be influenced by one another).

Update: Link to Grantham's commentary has been updated. You (and I) may now read a full reproduction of, "It's Everywhere, In Everything: The First Truly Global Bubble", courtesy of John Mauldin's Outside The Box e-letter.

Popular posts from this blog

Moneyball: How the Red Sox Win Championships

Welcome, readers . T o get the first look at brand new posts (like the following piece) and to receive our exclusive email list updates, please subscribe to the Finance Trends Newsletter .   The Boston Red Sox won their fourth World Series title of t he 21st century this we ek. Having won their first Se ries in 86 years back in 200 4, the last decade-plus has marked a very strong return to form for one of baseball's oldest big league clubs. So how did they do it? Quick background: in late 2002, team own er and hedge fund manager, John W. Henry (with his partners ) bought the Boston Red Sox and its historic Fenway Park for a reported sum of $ 695 million. Henry and Co. quickly set out to find their ideal General Manager (GM) to help turn around their newly acquired, ailing ship. This brings us to one of my fav orite scenes from the 2011 film , Moneyball , in which John W. Henry (played by Ar liss Howard) attempts to woo Oakland A's GM Billy Beane (Brad Pi

William O'Neil Interview: How to Buy Winning Stocks

Investor's B usiness Daily founder and veteran stock trader, William O'Neil share d his trading methods and insights on buying winning stocks in an in-depth IBD radio interview. Here are some highlights from William O'Neil's interview with IBD: William O'Neil's interest in the stock market began when he started working as a young adult.  "I say many times that I didn't get that much out of college. I didn't have much interest in the stock market until I graduated from college. When I got married, I had to look out into the future and get more serious. The investment world had some appeal and that's when I started studying it. I became a stock broker after I got out of the Air Force."    He moved to Los Angeles and started work in a stock broker's office with twenty other guys. When their phone leads from ads didn't pan out, O'Neil would take the leads and drive down to visit the prospective customers in person.

New! Finance Trends now at FinanceTrendsLetter.com

Update for our readers: Finance Trends has a new URL!  Please bookmark our new web address at Financetrendsletter.com Readers sticking with RSS updates should point your feed readers to our new Finance Trends feedburner .   Thank you to all of our loyal readers who have been with us since the early days. Exciting stuff to come in the weeks ahead! As a quick reminder, you can subscribe to our free email list to receive the Finance Trends Newsletter . You'll receive email updates about once every 4-8 weeks (about 2-3 times per quarter).  Stay up to date with our real-time insights and updates on Twitter .