Jeremy Grantham

The US 'superbubble' will deflate all the way back to trend, taking the S&P 500 down to about 2500 (time-adjusted) from nearly 4700, within about two years of January 2022.

“the higher you go, the longer and greater the pain you will have to endure to get back to trend – in the current case to a trend value of about 2500 on the S&P 500, adjusted for the passage of time, from whatever high point the market might reach (currently at nearly 4700).”

Said on

20 January 2022 · GMO Viewpoints essay "Let the Wild Rumpus Begin"

Source

Let The Wild Rumpus Begin · GMO

Should come true

by 2024

How sure they sounded

will have to endure; the wild rumpus can begin at any time

Categories

Markets

Importance

4 of 5 · A ~45-50% fall in US stocks would wipe out tens of trillions of dollars of wealth worldwide.

Outcome

Inaccurate

Inferred window ~2 years ("can begin at any time"). The S&P 500 bottomed at about 3,577 in October 2022, far above the ~2,500 trend level, and was back near 4,800 by January 2024 and at new highs afterwards.

Evidence:

• https://en.wikipedia.org/wiki/2022_stock_market_decline
• https://en.wikipedia.org/wiki/S%26P_500