The bursting of the US market bubble is not over yet, according to Jeremy Grantham



© Reuters.

Jeremy Grantham warned investors not to get too excited about stocks getting off to a good start this year, as the bursting of the US stock market bubble is not yet complete.

Bloomberg reported on Tuesday that Grantham, the co-founder and long-term investment strategist of GMO, said in a document that he calculates that the value of the at the end of the year should be around 3,200, which represents a decline of about 20% from current levels.

In an interview conducted in Boston, Grantham reportedly said the range of issues is larger than usual and « perhaps of unprecedented significance. »

Grantham, a well-known Wall Street bear, is quoted as saying, « There are more things that can go wrong than there are things that can go right », and there is « a definite chance » that things will go wrong and that we « could basically have the system start to go completely wrong on a worldwide basis. »

He even adds that it’s possible the benchmark could see a « sharp decline » and fall to around 2,000.

Mr Grantham adds that while the first, « easiest » stage of the bubble burst is complete, the next stage will be more complicated.

By Sam Boughedda

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