Already a subscriber?Jeremy Grantham, the most famous bubble hunter on global markets, says he’s spotted another one, as the artificial intelligence boom pushes the market to levels that make a further rally nearly impossible. And, as usual, he’s predicting it’s all going to end badly.
“Such revolutions are in the end often as transformative as those early investors could see and sometimes even more so – but only after a substantial period of disappointment during which the initial bubble bursts.” But his best guess is that this will eventually end in tears, too. “It seems likely that the after-effects of interest rate rises and the ridiculous speculation of 2020-21 and now will eventually end in a recession.”
“Yet we face in reality not just a very risky disturbed geopolitical world, with growing concerns about democracy, equality, and capitalism, but also an unprecedented list of long-term negatives beginning to bite.“The stark contrast between apparent embedded enthusiasm and these likely problems seems extreme, illogical, and dangerous.”
Second, Grantham remains a believer in resources, which he says will flourish as underinvestment in new production comes through. Even better, they are cheap at present having been whacked by concerns on global growth.