QUESTION: Is investing legend and perma-bear, Jeremy Grantham, going to be correct about the S&P500 falling 27% to 3,000 sometime this year?
ANSWER: Maybe.
Almost any asset valuation could be justifiable, mathematically, when interest rates were close to zero. Hence when interest rates rose, valuations dropped. It appears that Mr Grantham’s thesis is that that correction hasn’t been strong enough and there are other factors that may impact valuations (e.g. that old-fashion thing called earning per share).
That said, I’m fairly confident risks of the index going up 27% is much lower than the risk it will go down 27?