Jeremy Grantham, the legendary American investor who had already launched a few months ago the Super bubble alert on US equities, advising investors to prepare for “final act”or rather to “an epic ending”, he certainly hasn’t changed his mind with the start of the new year.
Far from it: the co-founder of GMO, an 84-year-old Boston asset manager and one of the best-known voices in the world of high finance, said he believed that the S&P 500 will end 2023 at around 3,200 points, almost 17% lower on an annual basis e del 20% YTD.
For the manager, the benchmark index could slip during the 2023 lows as well at lower levels, up to 3,000.
No recovery therefore for the price list in 2023. After a 2022 to forget, the S&P 500 will repeat the KOending 2023 still on its knees.
“The scale of the problems is wider than usual, perhaps never so massive”he said Jeremy Granthamin an interview with Bloomberg.
“There are more things that can go wrong than there can go right – he added, noting that there is a high probability that the system will go wrong a “global level”.
Jeremy Grantham is among Wall Street’s best-known managers for being bearish: a reputation confirmed by fears that the S&P 500 could drop as low as 2,000, in the midst of a “a brutal decline”.
History is proving him right, if one considers that the GMO Equity Dislocation Strategy, which is long on value stocks and short those companies that price “implausible growth expectations”, it gained nearly 15% last year through November, according to Bloomberg again.
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Jeremy Grantham reiterated this argument, noting that he believes value stocks could outperform growth stocks by up to 20 percentage points over the next 1-2 years.
It should be noted that on the Super bubble destined to explode, the motivation it is neither in the war in Ukraine and the resulting jump in inflation, nor in the problems that have affected the supply chain following the lockdowns imposed at the beginning of the Covid-19 pandemic.
In his opinion, the abrupt about-face was in fact inevitable, given that the shareholder was now following the same pattern as other rare “Investor Confidence Explosions” that they had presented in 1929, 1972 and 2000.
It was not for nothing that the legendary manager presented his nightmarish forecasts for the S&P 500 at the end of January 2022, when Vladimir Putin’s Russia had not yet invaded Ukraine.
About the titoli value VS i titoli growth, it must be said that the investment strategies that focus on value stocks had yielded little in the decade following the global financial crisis, in the face of the strong buys that had poured into growth stocks during the bull market made in the USA.
However, with the Federal Reserve which continues to raise rates to beat inflationvalue strategies have become increasingly persuasive.