Jeremy Grantham on Charlie Rose
Here are the events that you could have profited from (or avoided losses from) had you been listening to him:
- Japanese stock bubble of 1989
- Technology and growth stock bubble of 2007
- Avoid anything with risk in 2008
Here he is warning us again on something... here are his words:
My firm warned of vastly inflated Japanese equities in 1989 - the grandmother of all bubbles - US growth stocks in 2000 and everything risky in late 2007. The usual mix of investor wishful thinking and dangerous and cynical encouragement from industrial vested interests made these bubbles possible. Prices of global raw materials are now rising fast. This does not constitute a bubble, however, but is a genuine paradigm shift, perhaps the most important economic change since the Industrial Revolution. Simply, we are running out.
The price index of 33 important commodities declined by 70% over the 100 years up to 2002 - an enormous help to industrialized countries in getting rich. Only one commodity, oil, had been flat until 1972 and then, with the advent of the Organization of the Petroleum Exporting Countries, it began to rise. But since 2002, prices of almost all the other commodities, plus oil, tripled in six years; all without a world war and without much comment. Even if prices fell tomorrow by 20% they would still on average have doubled in 10 years, the equivalent of a 7% annual rise.
This price surge is a response to global population growth and the explosion of capital spending in China.
Here he is speaking to Charlie Rose last night. Viewing is mandatory if you are interested in the next 30 years: