Grantham, "Great Bear Markets Always Take Their Time"

By on July 6, 2008

Quotes from Jeremy Grantham:

“We are still in the super bear of 2000,” asserts Jeremy Grantham, chairman of money manager GMO. In a bear market, stocks fall back to, or below, their long-term trend line. But after the great bull market from 1982 to 2000, equities never flushed out their excesses “because of the Greenspan-inspired chain of bubbles, from growth stocks to real estate to commodities,” referring to former Federal Reserve Chairman Alan Greenspan. “Great bear markets always take their time, and the most likely end is 2010,” Grantham continues. If the S&P 500 were to fall to 1100 in 2010, that would be about a 13% decline from here, about 1263, and would put the index back on its long-term trend line. He adds: “Chances are we will overshoot on the downside. We always do. We will be lucky if it is 1100.”

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