IN THIS EPISODE, YOU’LL LEARN:

• Lessons Jeremy learned from his early career investing in the 1960s.
• How today’s market compares to previous superbubbles in the 1920s, 1989, 1999, and 2007.
• Jeremy’s view on the market rally since 2022, and the impact of the overcentration of the Magnificent 7 in the S&P 500.
• Why bubbles tend to last longer than we would expect them to.
• Whether using the P/E ratio is a reliable way to value the broader market.
• The major flaw in projecting compounding growth into the future from here.
• What Jeremy is seeing for innovation in the green energy space.
• And so much more!

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

[00:00:00] Clay Finck: On today’s episode, I’m joined by investing legend and market historian, Jeremy Grantham. Jeremy is the co-founder and investment strategist at GMO, one of the world’s most well-respected asset managers with tens of billions of dollars in AUM. Jeremy gives us an updated view on the recent stock market run up, how today’s market compares to market bubbles over the past century, and indicators that point to the potential bear market that lies ahead.

[00:00:24] Clay Finck: Jeremy successfully sidestepped past market bubbles such as the Japanese market in 1989, the tech bubble in 1999, the great financial crisis in 2008, and he also successfully called the bottom in the depths of that major market correction. He’s been calling for a market bubble for multiple years now, and he also explains here that he’s always been early in these market calls throughout much of his career.

[00:00:46] Clay Finck: We live in some really confusing times in markets as the Fed is now on the cusp of lowering interest rates and the market concentration of the top seven companies seems to only continue to increase. Jeremy brings to the show a wealth of wisdom and experience as he’s been an investor for well over 50 years.

[00:01:03] Clay Finck: While we’re all caught up in the day to day and year to year movements in the markets, Jeremy helps provide a 10, 000 foot overview and gives us a better sense of what is happening in the grander scheme of things. With that, I hope you enjoyed today’s discussion with Jeremy Grantham.

[00:01:21] Intro: Celebrating 10 years and more than 150 million downloads. You are listening to The Investor’s Podcast Network. Since 2014, we studied the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected. Now for your host, Clay Finck.

[00:01:49] Clay Finck: Welcome to The Investor’s Podcast. I’m your host today, Clay Fink. And today I have the great honor of being joined by investing legend, Mr. Jeremy Grantham. Jeremy, thanks so much for taking the time to join us today. It’s a pleasure, Clay. Thank you for having me. So what I really, really like about having you as a guest on the show is that you just have so much experience in the investing industry, and you’ve seen so many of these different market cycles and how people tend to behave at different points in the cycle.

[00:02:20] Clay Finck: I wanted to start with one question from your early career. It was back in 1968. You had the thrill of making exceptional returns in the land of microcaps. I was curious if you could tell us a bit about what you learned about investing during this time period that’s carried all the way with you to today.

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• Related Episode: Listen to TIP542: The Crisis Bigger Than Banks w/ Jeremy Grantham, or watch the video.
• Related Episode: TIP466: The Bear Has Arrived w/ Jeremy Grantham, or watch the video.
• Related Episode: TIP371: The Top of the Cycle w/ Jeremy Grantham, or watch the video.
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