上周,史上最具洞察力的兩位股市智者、從事投機熱潮預測數(shù)十載的卡爾?伊坎和杰里米?格蘭瑟姆公開指出,牛市已經(jīng)失序,股票價格被嚴重高估,預計出現(xiàn)大幅拋售。同一周,從盲目樂觀的華爾街基金經(jīng)理到癡迷于當日交易的X世代投資者卻無視警告,掀起了又一輪購買狂潮。1月7日,也就是上周四,標準普爾500指數(shù)、道瓊斯指數(shù)和納斯達克指數(shù)均被推至新高。
下月將滿85歲高齡的伊坎和現(xiàn)年82歲的格蘭瑟姆在市場預測和風險規(guī)避方面的經(jīng)驗加起來約有120年。伊坎擁有工業(yè)和投資集團公司Icahn Enterprises(市值118億美元)90%以上的股份,還持有Cheniere Energy、Newell Brands、施樂控股(Xerox Holdings)等公司數(shù)十億美元的股份。盡管他于2019年底將業(yè)務從曼哈頓遷到了邁阿密,但依舊和以前一樣忙碌。英國人格蘭瑟姆則是Grantham、Mayo、Van Otterloo、GMO的聯(lián)合創(chuàng)始人和長期投資策略師,管理著650億美元的資產(chǎn)。
如今,格蘭瑟姆的興趣主要在他的基金支持的環(huán)保事業(yè)上,并為此投入了92%的財富。雖然他已經(jīng)不再遴選個別股票,但仍然密切關(guān)注市場的總體走向,樂于對各類資產(chǎn)的今昔狀況進行對比分析,對過高或過低的資產(chǎn)給出預警。格蘭瑟姆和伊坎的預測角度不同。本文作者曾經(jīng)多次采訪伊坎,但從未聽到這位傳奇投資者談論市盈率、貼現(xiàn)率、風險溢價或其他專家在評估市場狀況時常用的指標。毫無疑問,伊坎對所有數(shù)字了如指掌,但他似乎更相信直覺,直覺告訴他:我以前見過這種情況,它總是意味著麻煩。
相比之下,格蘭瑟姆習慣用各種指標和數(shù)據(jù)支撐自己的觀點。但此次讓他和伊坎警覺的,與其說是數(shù)字,不如說是氣氛。世界瘋了,到處是瘋狂的猜測,到處是狂熱者,這些人控制了市場,任何有關(guān)股市會下跌的暗示都令他們憤怒。為何伊坎和格蘭瑟姆會同時發(fā)出警告?因為在這兩位久經(jīng)沙場的智者看來,眼下,尤其是過去幾周,股市上演的一幕堪稱“瘋子接管了瘋?cè)嗽骸?,而這正預示著大崩盤。
我曾經(jīng)在2000年用瘋狂來形容納斯達克指數(shù),并在2004年出現(xiàn)大規(guī)模房產(chǎn)拋售前警告房價已經(jīng)過熱,這證明瘋狂可以持續(xù)相當長時間。在納斯達克的例子中,很顯然,多頭違背現(xiàn)實,過度夸大了未來利潤大幅增長的預期。在房地產(chǎn)熱潮中,房價則偏離了作為定價基礎的房屋和公寓租金水平,完全失控。兩個案例里的買家都相信,估值已經(jīng)永久性地達到了一個比過去高得多的新平臺。結(jié)果,現(xiàn)實襲來,納斯達克指數(shù)下跌82%,房價下跌超過50%,二者均遠低于上漲前的水平。
1月4日,伊坎在與美國消費者新聞與商業(yè)頻道(CNBC)的主播斯科特?瓦普納的非直播交流中表達了自己的看法。伊坎在2020年4月25日就曾經(jīng)對股價過高發(fā)出警告,當時的標普指數(shù)比現(xiàn)在低25%,但他顯然認為,從那以后,股市已經(jīng)從泡沫走向瘋狂。此次,他暗示瓦普納,市場將出現(xiàn)大規(guī)模拋售?!拔疫@輩子見過很多瘋狂反彈,其中不乏大量錯價股票,但它們都有一個共同點,就是最終都碰了壁,陷入痛苦的大調(diào)整。沒有人能夠預測這種情況什么時候會發(fā)生,但當它到來時,一定要小心。”
伊坎沒有具體說明他在防范可能發(fā)生的災難方面采取了什么措施,但他提到,他已經(jīng)關(guān)注一段時間了,而且“做了相當不錯的防范”。伊坎最后警告說,“[過去的瘋狂反彈]還有一個共同點:人們總是說‘這次不一樣’,但從來沒有什么不一樣?!?/p>
格蘭瑟姆在GMO的網(wǎng)站上發(fā)表了一篇題為《等待最后一支舞:在泡沫后期進行資產(chǎn)配置的危險》的長文,表達了自己的看法。與伊坎的籠統(tǒng)警告不同,格蘭瑟姆的分析詳細而具體,也更顯緊迫,他甚至大膽預測:颶風將至。格蘭瑟姆說道:“自2009年以來的長期牛市終于變成了一個成熟飽滿、宏大壯觀的泡泡。股市被極度高估,股價暴漲,發(fā)行瘋狂,投資者的行為變得歇斯底里。我認為這一事件將成為金融史上最大的泡沫,堪比南海泡沫、1929大蕭條和2000年大崩盤。”他承認,逆流而動需要勇氣?!懊恳淮涡睦碚`判,都會讓投資者受到誘惑?!?/p>
格蘭瑟姆列舉了自己四次正確預見到危機將至并拋售股票的經(jīng)歷。2008年,他幾近準確地預測到市場高點,并“抓住”2009年初的低點重新進入。1987年,日本股市的市盈率由25倍漲至40倍,他意識到泡沫正在生成,賣掉了所有頭寸。隨后三年,股價一度飆升,1990年崩盤前的市盈率甚至達到65倍。盡管如此,格蘭瑟姆說自己做了正確的決定:以遠低于三年前拋出時的價格抄底。1997年,他在標普指數(shù)超過1929年峰值時減持了一半美股,此后美股一路高漲直至2000年6月。但GMO在2002年末股價下跌40%時大筆買入,此舉在隨后幾年帶來的回報遠勝過抱定原本的投資組合大起大落。
格蘭瑟姆指出,股市陷入瘋狂有兩點共性。第一是股價在后期加速上漲,這預示著離崩盤越來越近。眼下的情況正是如此:標普指數(shù)繼2020年8月中旬回升到2月創(chuàng)下的歷史高點以來又漲了12.4%,納斯達克自2020年10月底以來已經(jīng)上漲20%。第二,“回顧歷史,大泡沫后期總是伴隨著投資者的瘋狂行為,尤其是個人投資者?!彼a充說,在始于2009年的這輪牛市的頭10年里,股價逐步上漲,但基本沒有出現(xiàn)過度瘋狂的現(xiàn)象。然而現(xiàn)在,“價格越高就漲得越高”的說法成了新常態(tài)。格蘭瑟姆以柯達(Kodak)、赫茲(Hertz)、Nikola的短暫輝煌,以及投資者對特斯拉的持久癡迷為例,認為這些都是市場陷入瘋狂的標志。這位熱心的環(huán)保主義者強調(diào),盡管他很自豪地開著Model 3,但他“最津津樂道的關(guān)于特斯拉的趣聞”是,他們每賣出一輛車,市值就被推高125萬美元,相比于通用汽車(GM)的9000美元高出近140倍。
投資者對IPO公司的渴望是另一個不祥的信號。格蘭瑟姆指出,去年共有480家公司公開上市,其中包括248家特殊目的收購公司,大大超過2000年408家的紀錄。他認為關(guān)鍵問題在于,此輪超級牛市與以往有很大不同。以前的牛市均具有兩大特點:一是美聯(lián)儲(Federal Reserve)為市場提供了寬松的信貸,且保持低利率;另一個,他稱為“近乎完美的經(jīng)濟”,即能在相當長一段時間內(nèi)保持強勁、穩(wěn)定的勢頭。“如今經(jīng)濟受到重創(chuàng),情況完全不同?!彼f。隨著新冠疫情肆虐,美國經(jīng)濟正在面臨二度探底的危險,即便危機過去,失業(yè)率也可能居高不下。令格蘭瑟姆驚訝的是,與失業(yè)率處于歷史低點,銷售額、利潤和收入激增時相比,現(xiàn)在的市盈率卻高得多?!把巯碌氖杏侍幱跉v史高峰,而經(jīng)濟處于最低谷?!痹诟裉m瑟姆看來,這種懸殊絕非特殊目的收購公司的涌現(xiàn)可以解釋,而是體現(xiàn)了市場的狂熱。
根據(jù)過往的經(jīng)驗,格蘭瑟姆認為這是暴風雨前的艷陽。對于看漲者的主要觀點,即目前的極低利率以及美聯(lián)儲對未來幾年保持低利率的承諾能夠保證股價長期高企,他表示懷疑?!?020年時人們都認為精心設計的低利率始終可以防止資產(chǎn)價格下跌”,但低利率和超寬松貨幣政策并未在2000年阻止股市崩盤。
我同意格蘭瑟姆的觀點,低利率并不能夠保證高估值??紤]了通脹的“實際”利率反映出對資本的需求,且往往與經(jīng)濟增長掛鉤。經(jīng)濟增速越快,新投資的利潤就越高,爭奪投資資金的公司也越多。競爭拉高了利率。如果利率可以長時間保持在低位,可能意味著對資本的需求較弱,因為企業(yè)是在原地踏步,而不是迅速擴張,整體經(jīng)濟亦是如此。所以低利率通常意味著低增長和低利潤??礉q者用年復一年快速增長的收益為眼下這些超級昂貴的短跑健兒堆出了龐大的市值。他們以為未來利率將處于超低水平,利潤增長則將達到前所未有的超高水平。
然而歷史經(jīng)驗并不支持“低利率可以作為助推劑”的看法。監(jiān)管著1450億美元ETFs和共同基金投資策略的Research Affiliates的董事長羅布?阿諾特指出,20世紀50年代,十年期美國國債的收益率為1.0%至1.5%,但市盈倍數(shù)還不到目前的三分之一。格蘭瑟姆還提到,曾經(jīng)預報了2009年房價崩盤和2000年科技泡沫的耶魯大學經(jīng)濟學家羅伯特?希勒說,按照10年平均收益計算,盡管現(xiàn)在的市盈倍數(shù)比1929年和2007年的高,但目前的高價位在某種程度上可能是合理的。理由是:眼下股票的可能回報和債券的可能收益之間的差距較之于那兩個時期要大。格蘭瑟姆和阿諾特都不認同“股票比債券好得多,因此仍然不錯”的解讀。阿諾特認為,“希勒真正的意思是,債券太糟了,相比較而言,股票還沒有那么糟。”對此,格蘭瑟姆贊同道:“從歷史角度來看,債券甚至比股票還貴。天?。 ?/p>
格蘭瑟姆承認,準確預測峰值是不可能的。事實上,他常常在觸頂前就撤出價格過高的市場。但他強烈暗示,音樂將停,舞蹈將止,一切很快就會結(jié)束。他給出了兩個理由:多頭的熱情日益高漲,標志著狂熱的臨終劇痛的股價加速攀升。格蘭瑟姆說,自2020年夏天以來一直在觀望、錯過了股市大幅上漲的投資者做出了正確的決定,這意味著他們能夠在即將到來的災難之后以更低的價格大量買入。這些話,多頭一定不愛聽。但事實證明,格蘭瑟姆和伊坎數(shù)十載的成功策略就是在事態(tài)瘋狂時果斷退出,然后在投資者紛紛恐慌之際,趁著股價跳水的低點大筆買入。這才是這些傳奇人物渴望的瘋狂。(財富中文網(wǎng))
譯者:胡萌琦
上周,史上最具洞察力的兩位股市智者、從事投機熱潮預測數(shù)十載的卡爾?伊坎和杰里米?格蘭瑟姆公開指出,牛市已經(jīng)失序,股票價格被嚴重高估,預計出現(xiàn)大幅拋售。同一周,從盲目樂觀的華爾街基金經(jīng)理到癡迷于當日交易的X世代投資者卻無視警告,掀起了又一輪購買狂潮。1月7日,也就是上周四,標準普爾500指數(shù)、道瓊斯指數(shù)和納斯達克指數(shù)均被推至新高。
下月將滿85歲高齡的伊坎和現(xiàn)年82歲的格蘭瑟姆在市場預測和風險規(guī)避方面的經(jīng)驗加起來約有120年。伊坎擁有工業(yè)和投資集團公司Icahn Enterprises(市值118億美元)90%以上的股份,還持有Cheniere Energy、Newell Brands、施樂控股(Xerox Holdings)等公司數(shù)十億美元的股份。盡管他于2019年底將業(yè)務從曼哈頓遷到了邁阿密,但依舊和以前一樣忙碌。英國人格蘭瑟姆則是Grantham、Mayo、Van Otterloo、GMO的聯(lián)合創(chuàng)始人和長期投資策略師,管理著650億美元的資產(chǎn)。
如今,格蘭瑟姆的興趣主要在他的基金支持的環(huán)保事業(yè)上,并為此投入了92%的財富。雖然他已經(jīng)不再遴選個別股票,但仍然密切關(guān)注市場的總體走向,樂于對各類資產(chǎn)的今昔狀況進行對比分析,對過高或過低的資產(chǎn)給出預警。格蘭瑟姆和伊坎的預測角度不同。本文作者曾經(jīng)多次采訪伊坎,但從未聽到這位傳奇投資者談論市盈率、貼現(xiàn)率、風險溢價或其他專家在評估市場狀況時常用的指標。毫無疑問,伊坎對所有數(shù)字了如指掌,但他似乎更相信直覺,直覺告訴他:我以前見過這種情況,它總是意味著麻煩。
相比之下,格蘭瑟姆習慣用各種指標和數(shù)據(jù)支撐自己的觀點。但此次讓他和伊坎警覺的,與其說是數(shù)字,不如說是氣氛。世界瘋了,到處是瘋狂的猜測,到處是狂熱者,這些人控制了市場,任何有關(guān)股市會下跌的暗示都令他們憤怒。為何伊坎和格蘭瑟姆會同時發(fā)出警告?因為在這兩位久經(jīng)沙場的智者看來,眼下,尤其是過去幾周,股市上演的一幕堪稱“瘋子接管了瘋?cè)嗽骸保@正預示著大崩盤。
我曾經(jīng)在2000年用瘋狂來形容納斯達克指數(shù),并在2004年出現(xiàn)大規(guī)模房產(chǎn)拋售前警告房價已經(jīng)過熱,這證明瘋狂可以持續(xù)相當長時間。在納斯達克的例子中,很顯然,多頭違背現(xiàn)實,過度夸大了未來利潤大幅增長的預期。在房地產(chǎn)熱潮中,房價則偏離了作為定價基礎的房屋和公寓租金水平,完全失控。兩個案例里的買家都相信,估值已經(jīng)永久性地達到了一個比過去高得多的新平臺。結(jié)果,現(xiàn)實襲來,納斯達克指數(shù)下跌82%,房價下跌超過50%,二者均遠低于上漲前的水平。
1月4日,伊坎在與美國消費者新聞與商業(yè)頻道(CNBC)的主播斯科特?瓦普納的非直播交流中表達了自己的看法。伊坎在2020年4月25日就曾經(jīng)對股價過高發(fā)出警告,當時的標普指數(shù)比現(xiàn)在低25%,但他顯然認為,從那以后,股市已經(jīng)從泡沫走向瘋狂。此次,他暗示瓦普納,市場將出現(xiàn)大規(guī)模拋售?!拔疫@輩子見過很多瘋狂反彈,其中不乏大量錯價股票,但它們都有一個共同點,就是最終都碰了壁,陷入痛苦的大調(diào)整。沒有人能夠預測這種情況什么時候會發(fā)生,但當它到來時,一定要小心?!?/p>
伊坎沒有具體說明他在防范可能發(fā)生的災難方面采取了什么措施,但他提到,他已經(jīng)關(guān)注一段時間了,而且“做了相當不錯的防范”。伊坎最后警告說,“[過去的瘋狂反彈]還有一個共同點:人們總是說‘這次不一樣’,但從來沒有什么不一樣?!?/p>
格蘭瑟姆在GMO的網(wǎng)站上發(fā)表了一篇題為《等待最后一支舞:在泡沫后期進行資產(chǎn)配置的危險》的長文,表達了自己的看法。與伊坎的籠統(tǒng)警告不同,格蘭瑟姆的分析詳細而具體,也更顯緊迫,他甚至大膽預測:颶風將至。格蘭瑟姆說道:“自2009年以來的長期牛市終于變成了一個成熟飽滿、宏大壯觀的泡泡。股市被極度高估,股價暴漲,發(fā)行瘋狂,投資者的行為變得歇斯底里。我認為這一事件將成為金融史上最大的泡沫,堪比南海泡沫、1929大蕭條和2000年大崩盤。”他承認,逆流而動需要勇氣?!懊恳淮涡睦碚`判,都會讓投資者受到誘惑。”
格蘭瑟姆列舉了自己四次正確預見到危機將至并拋售股票的經(jīng)歷。2008年,他幾近準確地預測到市場高點,并“抓住”2009年初的低點重新進入。1987年,日本股市的市盈率由25倍漲至40倍,他意識到泡沫正在生成,賣掉了所有頭寸。隨后三年,股價一度飆升,1990年崩盤前的市盈率甚至達到65倍。盡管如此,格蘭瑟姆說自己做了正確的決定:以遠低于三年前拋出時的價格抄底。1997年,他在標普指數(shù)超過1929年峰值時減持了一半美股,此后美股一路高漲直至2000年6月。但GMO在2002年末股價下跌40%時大筆買入,此舉在隨后幾年帶來的回報遠勝過抱定原本的投資組合大起大落。
格蘭瑟姆指出,股市陷入瘋狂有兩點共性。第一是股價在后期加速上漲,這預示著離崩盤越來越近。眼下的情況正是如此:標普指數(shù)繼2020年8月中旬回升到2月創(chuàng)下的歷史高點以來又漲了12.4%,納斯達克自2020年10月底以來已經(jīng)上漲20%。第二,“回顧歷史,大泡沫后期總是伴隨著投資者的瘋狂行為,尤其是個人投資者?!彼a充說,在始于2009年的這輪牛市的頭10年里,股價逐步上漲,但基本沒有出現(xiàn)過度瘋狂的現(xiàn)象。然而現(xiàn)在,“價格越高就漲得越高”的說法成了新常態(tài)。格蘭瑟姆以柯達(Kodak)、赫茲(Hertz)、Nikola的短暫輝煌,以及投資者對特斯拉的持久癡迷為例,認為這些都是市場陷入瘋狂的標志。這位熱心的環(huán)保主義者強調(diào),盡管他很自豪地開著Model 3,但他“最津津樂道的關(guān)于特斯拉的趣聞”是,他們每賣出一輛車,市值就被推高125萬美元,相比于通用汽車(GM)的9000美元高出近140倍。
投資者對IPO公司的渴望是另一個不祥的信號。格蘭瑟姆指出,去年共有480家公司公開上市,其中包括248家特殊目的收購公司,大大超過2000年408家的紀錄。他認為關(guān)鍵問題在于,此輪超級牛市與以往有很大不同。以前的牛市均具有兩大特點:一是美聯(lián)儲(Federal Reserve)為市場提供了寬松的信貸,且保持低利率;另一個,他稱為“近乎完美的經(jīng)濟”,即能在相當長一段時間內(nèi)保持強勁、穩(wěn)定的勢頭?!叭缃窠?jīng)濟受到重創(chuàng),情況完全不同。”他說。隨著新冠疫情肆虐,美國經(jīng)濟正在面臨二度探底的危險,即便危機過去,失業(yè)率也可能居高不下。令格蘭瑟姆驚訝的是,與失業(yè)率處于歷史低點,銷售額、利潤和收入激增時相比,現(xiàn)在的市盈率卻高得多?!把巯碌氖杏侍幱跉v史高峰,而經(jīng)濟處于最低谷。”在格蘭瑟姆看來,這種懸殊絕非特殊目的收購公司的涌現(xiàn)可以解釋,而是體現(xiàn)了市場的狂熱。
根據(jù)過往的經(jīng)驗,格蘭瑟姆認為這是暴風雨前的艷陽。對于看漲者的主要觀點,即目前的極低利率以及美聯(lián)儲對未來幾年保持低利率的承諾能夠保證股價長期高企,他表示懷疑?!?020年時人們都認為精心設計的低利率始終可以防止資產(chǎn)價格下跌”,但低利率和超寬松貨幣政策并未在2000年阻止股市崩盤。
我同意格蘭瑟姆的觀點,低利率并不能夠保證高估值??紤]了通脹的“實際”利率反映出對資本的需求,且往往與經(jīng)濟增長掛鉤。經(jīng)濟增速越快,新投資的利潤就越高,爭奪投資資金的公司也越多。競爭拉高了利率。如果利率可以長時間保持在低位,可能意味著對資本的需求較弱,因為企業(yè)是在原地踏步,而不是迅速擴張,整體經(jīng)濟亦是如此。所以低利率通常意味著低增長和低利潤??礉q者用年復一年快速增長的收益為眼下這些超級昂貴的短跑健兒堆出了龐大的市值。他們以為未來利率將處于超低水平,利潤增長則將達到前所未有的超高水平。
然而歷史經(jīng)驗并不支持“低利率可以作為助推劑”的看法。監(jiān)管著1450億美元ETFs和共同基金投資策略的Research Affiliates的董事長羅布?阿諾特指出,20世紀50年代,十年期美國國債的收益率為1.0%至1.5%,但市盈倍數(shù)還不到目前的三分之一。格蘭瑟姆還提到,曾經(jīng)預報了2009年房價崩盤和2000年科技泡沫的耶魯大學經(jīng)濟學家羅伯特?希勒說,按照10年平均收益計算,盡管現(xiàn)在的市盈倍數(shù)比1929年和2007年的高,但目前的高價位在某種程度上可能是合理的。理由是:眼下股票的可能回報和債券的可能收益之間的差距較之于那兩個時期要大。格蘭瑟姆和阿諾特都不認同“股票比債券好得多,因此仍然不錯”的解讀。阿諾特認為,“希勒真正的意思是,債券太糟了,相比較而言,股票還沒有那么糟?!睂Υ?,格蘭瑟姆贊同道:“從歷史角度來看,債券甚至比股票還貴。天啊!”
格蘭瑟姆承認,準確預測峰值是不可能的。事實上,他常常在觸頂前就撤出價格過高的市場。但他強烈暗示,音樂將停,舞蹈將止,一切很快就會結(jié)束。他給出了兩個理由:多頭的熱情日益高漲,標志著狂熱的臨終劇痛的股價加速攀升。格蘭瑟姆說,自2020年夏天以來一直在觀望、錯過了股市大幅上漲的投資者做出了正確的決定,這意味著他們能夠在即將到來的災難之后以更低的價格大量買入。這些話,多頭一定不愛聽。但事實證明,格蘭瑟姆和伊坎數(shù)十載的成功策略就是在事態(tài)瘋狂時果斷退出,然后在投資者紛紛恐慌之際,趁著股價跳水的低點大筆買入。這才是這些傳奇人物渴望的瘋狂。(財富中文網(wǎng))
譯者:胡萌琦
During the week of Jan. 4, two of the all-time great stock market sages—who've been expert at calling speculative crazes for decades—charged that the bulls had lost their marbles. Carl Icahn and Jeremy Grantham went public claiming that equities are vastly overpriced and due for a steep selloff. The same week, the cockeyed optimists from Wall Street money managers to Gen Xers hooked on day trading ignored their warning, staging still another buying frenzy that on last Thursday, Jan. 7, pushed the S&P 500, Dow, and Nasdaq to fresh records.
Between them, Icahn, who'll turn 85 next month, and Grantham, at 82, have a total of around 120 years of experience navigating the markets and skirting just the kinds of disasters they see coming. Icahn owns over 90% of industrial conglomerate and investment vehicle Icahn Enterprises (market cap: $11.8 billion), and holds billions more in shares of companies as diverse as Cheniere Energy, Newell Brands, and Xerox Holdings. Though Icahn moved his operations from Manhattan to Miami in late 2019, he remains as busy an activist as ever. Grantham, a native of Britain, is cofounder and long-term investment strategist at Grantham, Mayo, Van Otterloo, or GMO, the $65 billion asset management stalwart.
Today, Grantham’s interests center on his foundation supporting environmental causes, the institution he's backed with 92% of his wealth. But though he's no longer picking individual stocks, Grantham follows the market's overall trajectory closely, and he prides himself on calling when types of assets are excessively cheap or pricey compared with past periods. Grantham and Icahn come at their forecasts from different angles. This writer has interviewed Icahn many times, and he's never heard the storied investor talk about price-to-earnings multiples, discount rates, risk premiums, or any of the other metrics the experts typically cite in assessing where the market stands. I have no doubt Icahn knows all the numbers, but he appears to rely on instincts that tell him, I've seen this scenario before, and it always spells trouble.
By contrast, Grantham summons sundry metrics and data to support his case. But what sounds the alarm for Grantham, as for Icahn, isn't so much the numbers as the atmospherics, the sense of a world gone mad, of wild speculation, of zealots—outraged at any suggestion stocks will drop—taking charge. What prompted Icahn and Grantham to issue their warnings at the same time? The veterans both see the same "lunatics are taking over the asylum" script taking hold, especially in the last few weeks, that presaged past meltdowns.
This reporter called the Nasdaq frenzy in 2000 and warned that housing prices had gone nuts in 2004, two years before the giant selloff: proof the craziness can last a long time. In the case of the Nasdaq, it was clear that bulls had wildly overblown expectations for huge future growth in profits that couldn't happen. In the housing craze, prices had become totally detached from the force that governs them, the level of rents on homes and apartments. In both cases, the bulls bought the notion that valuations had permanently reached a new, much higher plateau than in the past. When reality struck, the Nasdaq dropped 82%, and housing prices retreated over 50%. The falls took prices well below their levels when the run-ups began.
Icahn made his comments on Jan. 4 in an off-air conversation with CNBC anchor Scott Wapner. Icahn had warned that equities were overvalued on April 25, 2020, when the S&P was 25% cheaper than today, but he clearly believed things had tilted from frothy to crazy since. This time, he suggested to Wapner that a major selloff is looming. "In my day, I've seen a lot of wild rallies with a lot of mis-priced stocks, but there's always one thing they all have in common," declared Icahn. “Eventually they hit a wall and go into a major painful correction, and nobody can predict when it will happen. But when it does, look out below."
Icahn didn't specify any bets he's making to guard against a possible cataclysm, but he did note that he's been concerned for some time and is "pretty well-hedged." In conclusion, Icahn cautioned, "Another thing [these wild rallies] have in common: It's always said ‘It's different this time,’ but it never turns out to be the truth."
Grantham delivered his salvo in a long essay on GMO's website titled "Waiting for the Last Dance: The Hazards of Asset Allocation in the Late Stages of a Bubble." While Icahn's warning is general, Grantham is extremely specific, detailed, and even more dire—he even dares predicting that the hurricane could strike soon. "The long, long bull market since 2009 has finally matured into a full-fledged, epic bubble," writes Grantham. "Featuring extreme overvaluation, explosive price increases, frenzied issuance, and hysterically speculative investor behavior. I believe this event will be recorded as one of the great bubbles in financial history, right along with the South Sea bubble, 1929, and 2000." He acknowledges that going against the crowd will take courage. "Every fault of human psychology will be pulling investors in," he cautions.
Grantham cites four occasions when he correctly saw trouble brewing and dumped stocks. In 2008, he came close to calling the market top, and also "nailed" the lows of early 2009, when he jumped back in. In 1987, he saw a bubble building in Japan when its market P/E hit 40, dwarfing the previous high of 25. Grantham sold all of his positions but was three years early. Shares soared for a while, driving multiples to 65 before the market collapsed in 1990. Still, Grantham says he made the right call: He scooped up bargains at prices far below where he had bailed out three years before. He also lowered his U.S. holdings by half in 1997 when the S&P multiple surpassed its 1929 peak, only to soar until June 2000. But GMO grabbed shares during the 40% drop through late 2002, a coup that produced much better returns in future years than holding the same portfolio through the roller-coaster ride.
Grantham notes two factors that are common to these crazes. The first is that prices spike at an accelerating pace in the late stages, signaling that we're getting closer and closer to a crash. That's precisely what's happening now: Since regaining its all-time high set in February by mid-August, the S&P has vaulted another 12.4%, and since late October, the Nasdaq has jumped 20%. Second, as Grantham writes, "The single most dependable feature of the late stages of the great bubbles of history has been really crazy investor behavior, especially on the part of individuals." He adds that for the first 10 years of this bull market, which began in 2009, stocks gradually ground higher, and were getting more and more expensive, but wild excesses were mainly absent. Now the mantra that “the higher prices go, the higher they'll go from there” is the new normal. Grantham cites the fleeting embrace of Kodak, Hertz, and Nikola, and especially enduring infatuation with Tesla, as hallmarks of a market gone loco. The ardent environmentalist stresses that though he proudly drives the Model 3, his "favorite Tesla tidbit" is that it boasts a market cap of $1.25 million for every car it sells, 140 times the GM figure of $9,000.
Investors' craving for IPOs is another bad sign. Grantham notes that last year saw 480 public offerings, including 248 SPACs (special purpose acquisition companies), easily eclipsing the record 408 IPOs in 2000. In one key respect, he says, this over-the-top bull market is vastly different from the others. Its predecessors shared two main features: a lenient Federal Reserve that flooded markets with easy credit and held interest rates low, and what he calls a "near-perfect economy" boasting strong, steady growth that looked like it would last a long time. "Today's wounded economy is totally different," he says. America's facing the danger of a double dip as the COVID-19 pandemic rages on, and unemployment is likely to remain stubbornly high even when the crisis ends. Grantham marvels that prices relative to earnings are now much higher than when the jobless rate was at historic lows and sales, profits, and incomes were surging. "Today's P/E ratio is in the top few percent of the historical range, and the economy is in the worst few percent," he says. For Grantham, that divergence tells us more about the raging market fever than the rash of new SPACs.
Based on what he's seen in the sunny preludes to past storms, Grantham doesn't buy the bulls' main argument: that extremely low interest rates, and the Fed's pledge to keep them down for a couple of years to come, justify permanently high prices for stocks. "The mantra for 2020 was that engineered low interest rates can prevent a decline in asset prices. Forever!" he observes. But low rates and super-loose money didn't prevent stocks from cratering in 2000, he notes.
I agree with Grantham's view that low rates don't guarantee high valuations. "Real" rates, adjusted for inflation, reflect demand for capital, and they tend to track economic growth. The faster the economy is waxing, the more profitable new investments become, and the more companies compete for the capital needed to fund those investments. That competition drives up rates. If rates may remain low for a long time, it probably means demand for capital is weak because companies, and hence the economy, are running in place instead of briskly expanding. So low rates generally mean low growth and low profits. And the bulls are banking years and years of fast-rising earnings for today's ultra-pricey sprinters to grow into their gigantic market caps. They're predicting a future of both ultralow rates and ultrahigh profit growth that's never reigned in the past.
History doesn't support the "low rates as rocket fuel" view. Rob Arnott, chief of Research Affiliates, the firm that oversees investment strategies for $145 billion in ETFs and mutual funds, points out that in the 1950s, the 10-year Treasury yielded 1.0% to 1.5%, yet multiples were less than one-third of today's levels. Grantham also observes that Yale economist Robert Shiller, who called the housing collapse of 2009 and tech bubble of 2000, now says that although multiples, using an average of 10 years of earnings, are even higher than in 1929 and 2007, today's lofty prices may be somewhat justified. The reason: The spread between the probable return on stocks and what you can get from bonds is better than in either of those two periods. Both Grantham and Arnott reject the view "stocks are still good ’cause they're so much better than bonds." "What Shiller's really saying is that bonds are terrible, and stocks are slightly less terrible," says Arnott. Grantham agrees: "Bonds are even more spectacularly expensive by historical comparison than stocks. Oh my!"
Grantham acknowledges that it's impossible to call a top. Indeed, he often fled overpriced markets well before the peak. But he strongly implies, as he puts it, that the music will stop, and the dance end, fairly soon. He cites two reasons: the intensifying of enthusiasm for the bulls, and the acceleration in prices that marks a mania's death throes. Grantham says that investors who've been sitting out since the summer of 2020, and missed the big run-up, made the right decision, implying they'll be able to buy shares a lot cheaper in the aftermath of the coming catastrophe. Those are words the bulls will hate. But getting out when things were getting crazy proved a winning strategy for Grantham, and Icahn, for decades. Then they'll do what has always made them successful—feast on the bargains when investors panic and prices go irrationally, crazily low. That's the kind of craziness these legends crave.