Grantham: Stocks Not This Cheap Since 1987

Market seer and GMO chief Jeremy Grantham predicted financial debacle. Now he's buying.

Russel Kinnel 15 October, 2008 | 1:57PM
A couple weeks ago I had a scary thought: Things are worse than Jeremy Grantham predicted. It's a bit frightening when one of the most bearish market seers has understated the risks and intriguing at the same time because he was spot on in terms of the direction of his predictions. So, I checked in with him on Monday, Oct. 13 to see what he makes of the current situation. The markets were up about 5% when we spoke, and Grantham thought it had come close to returning to fair value.

Back in July 2007, I spoke with Grantham, who predicted half of the hedge funds and at least one major U.S. bank would be wiped out. Grantham is chairman of asset manager GMO LLC which runs mutual funds and hedge funds. He advocated going into all manner of anti-risk baskets such as Treasury bills and TIPS a

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About Author

Russel Kinnel  is Morningstar's director of fund research. He is also the editor of Morningstar FundInvestor, a monthly newsletter dedicated to helping US investors build winning portfolios.

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