Jeremy Grantham, the co-founder of Boston-based money manager Grantham Mayo Van Otterloo (GMO), has been cautioning about an impending stock market crash since 2015 and the latest trends haven’t brought about a change in that stance.
Despite the recent rally in tech stocks driven by hopes of a boom in artificial intelligence that has seen stocks like Nvidia Corp. NVDA fly, Grantham maintains that the wider market is still poised for a fall. SPDR S&P 500 ETF Trust SPY is up 16.4% this year so far.
GMO is currently betting big on deep-value stocks and bonds backed by commercial real estate, The Wall Street Journal reports.
Grantham’s Predictions
Grantham has a reputation for predicting market bubbles, having foreseen the dot-com and housing-market busts of 2000 and 2008. He describes the current market environment as the final act of the fourth U.S. superbubble of the past century, according to WSJ.
GMO’s Strategy
GMO is doubling down on contrarian wagers, betting on deep-value stocks that trade at bargain prices relative to their fundamentals. The firm also sees opportunities in bonds backed by commercial real estate.
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