And the quicker the bubbles end, the better off everybody is. But since by definition, you've gone further up, it takes longer and more painful and more pain to come down. And the 3-sigma events, we have 1929, 2000 and today, in the equity market, and Japan as a major market overseas in 1989. And two out of three, certainly more than half of 2-sigma go on to 3-sigma in recent times. So, they are much further away from random than 2-sigma. have gone up to 3-sigma, which is the kind that you would expect every 100 years, but as I like to say, humans do seriously crazy pretty well. The complexity comes from the fact that some of these 2-sigma events continue to go up. And the fact that all of them went back without exception, we find a very compelling idea. The 2-sigma is pretty straightforward statistics. And we noticed that all of them in the developed world in modern times in equity markets went back to the trend. And with human beings who are capable of being a little inefficient, they occur every 35 years in the equity markets, close enough, I would say, for government work. A 2-sigma event is the kind that should occur every 44 years in a perfectly random world. And we picked a standard statistical term of a 2-sigma. Grantham: About 25 years ago, we felt in order to talk about bubbles, we should probably define them statistically. What is a bubble? And what makes the U.S. Here are our six takeaways on how not to repeat history and potentially sidestep the market crash. stock market “super bubble” could be more devastating than investors are prepared for. Grantham offers a strong warning: The bursting of the U.S. In a wide-ranging and timely conversation, Jeremy Grantham joined Morningstar’s Christine Benz and Jeff Ptak on The Long View podcast, discussing everything from meme stocks to the housing market to the potential bursting of the stock market “super bubble.” Grantham, the long-term investment strategist at his namesake firm that he co-founded, Grantham, Mayo, Van Otterloo & Co., spoke at length about what we’ve learned, and what has changed, since 2008, taking into account new strains for investors that rose alongside the pandemic.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |