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Jeremy Grantham, of GMO, believes we will overshoot to the downside – possibly hitting as low as 450 on the S&P.

GMO chairman Jeremy Grantham is more upbeat — though he does expect more pain to precede any recovery.

Looking back at historic bear markets, Grantham draws comparisons to 1974 and 1982, when the S&P 500 lost roughly half its value. Since he estimates the current S&P 500 fair value at 900, Grantham puts his worst-case bottom at a hair-raising 450.

“That’s fairly scary, but on the one hand we look at the massive stimulus, and then on the other we try to work out the fact that the global economy is in worse shape than it was in ’74 or ’82,” says Grantham. “I’d say there are three-to-one odds that we go to a material new low. We should count on [the S&P 500] hitting 600 for a little while, and we should hope like mad it doesn’t get deep into the 500s.”