Economics, Videos

Jeremy Grantham On.. Melt Up

Via Consuelo Mack WealthTrack

There are very few investors who can lay claim to recognizing a major market turning point, let alone several of them. This week’s guest is one of them.

Legendary value investor Jeremy Grantham is the co-founder of the global investment management firm, GMO, where he is Chief Investment Strategist and member of its asset allocation team. The firm oversees about $74 billion in assets for mostly institutional clients.

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Grantham is known for his prescient calls about those rare tectonic shifts that change the investment landscape. He saw the tech stock crash of the late 1990s coming a decade in advance. A decade later he warned of the developing credit bubble and its devastating collapse and then called the market bottom in March of 2009 when he wrote an article for GMO clients titled Reinvesting When Terrified. In it he lectured them that they “…absolutely must have a battle plan for reinvestment and stick to it.”
Recently Grantham has been predicting a possible market melt-up, a powerful late stage, two to three year-long market rally that could carry the S&P 500 up more than 60%. He notes that unfortunately that could be the final gasp before another major market decline.
We asked Grantham to make his case for a market melt-up and subsequent melt-down, and for advice on what investors should do through both.

Jeremy Grantham