Value investor Jeremy Grantham said U.S. technology stocks and the craze for blank-check companies have both already peaked and that the broader stock market is vulnerable.
“My guess is in the next few months the termites will get to the rest of the market,” the 82-year-old co-founder of Boston-based GMO told a conference in Sydney via web-link. The Nasdaq and SPACs—blank-check firms—have likely peaked, he added.
Grantham is well-known for his bearish views and in January predicted an epic bubble in U.S. stocks would end with a crash. Equities later scaled new highs, adding to the perception that he’s a perma-bear who misses out on rallies.
“The market is at an all-time high, optimism is at an absolute peak,” he said. “We’ve turned the pressure up and up, more money, more moral hazard so here we are at the peak.”
Global stocks are near a record amid the recovery from the pandemic and ample liquidity, though speculative fringes—from cryptocurrencies to SPACs—suffered bouts of volatility of late. The Nasdaq 100 Index is about 3% shy of its mid-April record.
This article was provided by Bloomberg News.