- Jeremy Grantham warned last year that the multi-asset “superbubble” would burst in spectacular fashion.
- The elite investor recently detailed how the AI epidemic changed his dire predictions.
- Grantham said AI is unlikely to interfere with the bursting of the bubble, but could limit its impact.
Last year, Jeremy Grantham warned of a multi-asset “superbubble” that would end in a historic crash. In a recent WealthTrack interview, he shared his take on the artificial intelligence craze that’s been driving stock prices up lately.
The veteran investor and GMO co-founder said the AI frenzy probably won’t keep the bubble from bursting. But it could be. That means he now has a 70% chance of a severe downturn, not 85%.
The market historian also called for AI to be regulated given its dangerous potential, and advised investors who made big money in big tech stocks this year to take some cash with them.
Below are Grantham’s eight best quotes. Lightly edited for length and clarity.
1. “I’m a little uneasy that something like a mini-bubble is emerging in the field of artificial intelligence. We’ll see if it brings enough speed and strength to change the final stages of this bubble.” I am trying.”
2. “Lord knows this was complicated before the AI raised its ugly head. We have had inflation. , how the war unfolds. Oh my god, it goes on” and further. “
3. “My guess is that this bubble timeframe is not working. A fairly traditional bubble will lose air, and we’ll see a recession, lower profit margins, and some grief in the stock market.” We have a year or two to go, and we can do it, before the real impact of AI.”
4. “I suspect that this process has already dragged on somewhat, but it is very unlikely that this process will be mitigated, so it will only be a small reduction. , back to 70%.” (Grantham told The Wall Street Journal separately that AI could strengthen stock prices for a few quarters, but it wouldn’t stop the bubble from bursting.)
5. “History tells us that if we handle the economy very poorly, it may end up like it did in 1929. will do the trick and drive the market down.” Easiest recession ever, graceful recession, and yet the Nasdaq is down 82%. “
6. “Artificial intelligence is clashing about the future like never before. Some of the smartest people on the planet are saying, ‘That’s utter nonsense. Some say, ‘Everything will change and productivity will double over the decades.’ And there is everyone in between. “
7. “Imagine a world with a million devices learning everything at the same time, with an IQ of 200 on that device. “Their opinion stands above theirs. I agree with the group that it should be regulated.”
8. “It’s a good reflex to think that they were very lucky. They got the strong speculation about artificial intelligence right and made an unprecedented 25% profit on anything. I’m at least respectable.” I will accept it.” I would be profitable. (Grantham was advising investors who made money in big tech stocks this year.)
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