저자: JeremyGrantham-자막내'사회자해설'부분이섞여있으나출연자발언중심 · 외국인
요약 보기
그랜덤은 현재 시장을 1929·2000년·일본 버블급 대형 거품으로 보며, 거품은 경기·이익률이 최고조일 때 꺼지고 이익률 하락이 불황의 첫 신호라고 주장. 현재 침체(경미하거나 심각하거나)가 곧 올 가능성이 높다고 봄. 장기적으로 1970년대식 스태그플레이션 위험과 공급망 취약성을 지적. 지수 투자는 거품 종목도 함께 담는 단점이 있다고 언급하며, 50% 하락을 견딜 수 있어야 한다고 강조.
다듬은 글
I only specialize in what I call the really great bubbles. If you go back to 1929, to 2000, to Japan and the housing part of the housing bubble, and you ask how did conditions look? Profit margins look great, the forecast was great, there was no chance of a recession. A few months ago, smart people were saying there was a 20% chance of a recession in 3 years.
It's quite amazing. And what happens after the bubbles break is there always a recession pretty quickly. People never get it, people never forecast it and along with the recession comes a drop in profit margins. Going into the bubbles breaking, profit margins are always at a peak. Bubbles don't peak for no reason.
They peak because economic conditions are nearly perfect, and that includes low inflation and high profit margins. And the first thing to go in a recession, of course, is the profit margins. That is very likely to happen this time. We should be in a recession—mild or severe is the question—but we should be in some sort of recession fairly quickly.
And profit margins from a real peak have a long way that they can decline. Grantham’s point about bubbles peaking during economic “perfection” reminds me of a recurring theme in financial history—overconfidence. Just before the 1929 crash, optimism was at its height. Investors believed in a "new era" of permanent prosperity.
Stock prices were skyrocketing, fueled by high profits, low inflation, and easy credit. But behind that facade, the fundamentals were already cracking. It wasn’t until the market imploded that people realized how fragile that prosperity really was. Take Japan in the late '80s. The Nikkei index was at an all-time high, real estate prices were astronomical—so much so that the land under the Tokyo Imperial Palace was valued higher than the entire state of California.
There was this belief that the good times would never end. But when the bubble burst in the early '90s, the economy entered what we now call the "Lost Decade." Over 30 years later, Japanese stocks still haven’t returned to their peak, and real estate prices never fully recovered. We can also look at profit margins through the lens of corporate behavior.
When margins are high, companies tend to get reckless. In the lead-up to the 2008 financial crisis, banks and real estate developers were posting record profits. But those profits came from risky lending practices—subprime mortgages, leveraged debt, and over-leveraged financial institutions. A study from the Federal Reserve found that the top 25 banks increased their leverage ratios by 40% between 2004 and 2007, chasing those high margins.
When the bubble burst, the margins evaporated overnight, dragging the entire global economy into a recession. Grantham’s prediction about declining profit margins as the first casualty of a recession isn’t just a theory—it’s an economic law we’ve seen play out time and again. And if you want to get into the longer term, I think this kind of 2000 bubble that we have is dangerously likely to morph into the 1970s, where inflation is always a part of the background discussion and where growth rates start to dwindle away.
So, you have shades of stagflation as we had in the 70s, where commodities are intermittently scarce, price jags here and there as we have seen recently, where the whole system is so strung out and so borrowed that it's lost its resilience. All you have to do is cough in COVID or a war in Ukraine, and you see the problems ricocheting around the system that was not designed to absorb any kind of punch.
Last-minute inventory delivery, no reserves, putting all of your business with one country far away, no flexibility, no resilience—and now we begin to pay the price. The beauty about indexing is you never miss an Amazon or an Apple, and the bad thing about indexing is you never miss having a lot of overpriced stocks in one of the relatively rare bubbles such as we have now.
So, it's kind of good news, bad news. If you can ride out the odd 50% decline, totally unnecessary, of course, on fundamentals 30 years ago, the market is mildly hysterical from time to time, and it's totally unjustified by the steady stream of dividends and earnings. But it happens. And if you want to ride those 50% drops, you know, good luck.
It works out very well in the long, long run, but it can take you 20 years to get back in the game if you get caught in 1929. It works out just fine, but you don't get your money back until 1955. If you get hammered in '74, you don't get your money back until '87, and then when you've gotten it back for a month or two, you give it up again.
The same in 2000—by 2010, you're still losing money. So, you have to be willing to ride out, and some people feel their lives aren't long enough to take the odd 10, 15, 20-year wipeout. Grantham’s comparison to the 1970s is critical. It’s not just about bubbles bursting—it’s about the prolonged effects that follow.
The stagflation of the 1970s is a perfect parallel: soaring inflation, stagnant growth, and an overall economic system struggling to regain balance. What’s interesting is how familiar this scenario sounds today. We’re seeing shortages in key commodities, prices spiking due to global conflicts like the war in Ukraine, and supply chains that are stretched thin due to years of offshoring and reliance on just-in-time delivery systems.
Look at how COVID-19 exposed the vulnerability of our supply chains. The reliance on distant manufacturing hubs, combined with minimal stockpiling, left industries scrambling for basic goods. Just like in the 70s, today’s companies are facing the consequences of prioritizing short-term profit over long-term resilience.
As for the market drops Grantham mentions, the psychological toll of riding out these massive declines cannot be overstated. Imagine being an investor in 1929, watching your portfolio sink with no promise of recovery for decades. Data from a Yale study on investor behavior shows that during major downturns, even seasoned investors are more likely to sell at the bottom, locking in losses.
It’s not just about the numbers on a screen—it’s about the fear that drives decision-making. And in these moments, the disparity between the wealthy and average investors becomes stark. The rich can afford to wait, while others may never recover. For those who feel they're brave enough and willing to try, I've always thought that sidestepping some of the pain might be a good idea.
I think they're perfectly straightforward—they're intellectually easy and psychologically disastrously difficult. They're easy because in most cases, they're so extreme. It's like, how do you not notice the Himalayas when you're landing in northern India? I mean, they come out of the plane, and they soar up—you can't miss these things.
1928-29 was just such a massive rally, so the sheer price rise you can't miss. Secondly, just to make it easier, the great bubbles have always tended to rise faster and faster towards the end, and that's a kind of defining feature also. And then thirdly, they have all been accompanied by massive public, obvious, crazy behavior, where the headlines migrate from the financial page to the front page, where they migrate to the opening few sentences of the evening news, on the radio, on the television.
And they talk about market new highs, and they talk about what the Bitcoins of the era have done. Grantham’s analogy to the Himalayas is a brilliant way to illustrate the obvious nature of these massive bubbles—yet so often, people ignore the signs. It's like watching a car head toward a cliff but believing it will somehow stop at the last moment.
History shows us otherwise. Take the 1929 crash, for example. Stock prices had been rising so fast that many assumed the growth was endless. The problem is that this irrational exuberance gets amplified as more and more people jump on the bandwagon, creating a self-reinforcing loop. This is exactly what we’ve seen with modern bubbles like Bitcoin or even the housing market in 2007.
Headlines start to hype these assets, making them a part of everyday conversation. It shifts from financial pages to dinner table talk, much like we saw during the Bitcoin frenzy of 2017. A study by the National Bureau of Economic Research showed how retail investors flood into these markets late in the game, driven by media hype, only to suffer the most when things collapse.
It’s this "everyone is getting rich but me" mentality that pushes the bubble higher, but it’s also what makes the crash inevitable. When speculative assets become part of mainstream news, it’s often a signal that the peak is near. I know it's not a stock, but it's a speculative instrument. And the GameStops of the world, and back in 2000, most of you will be old enough to remember the Pets.com and the utter craziness of that period.
The same was true of 1929, the same was true of Japan. We had a group from Salomon Brothers, leading American brokerage house of the era, who came around in '88-89 when Japan was moving to 60 times earnings, explaining that their yields, etc., and their interest rates, etc., they really should have been selling at 100 times, and they were cheap, and you should buy them.
And it didn't stop the Japanese market breaking the following year—it has not recovered the high of 31 years ago yet. So that was pretty painful. It taught us, in a sense, a powerful lesson about how human behavior works, but it also explained to us why the big firms couldn't play that game. It is simply not a commercial proposition to get out of a bull market because every now and then they run further and faster than you expected.
Japan went on and on and on, way beyond people's expectations. 2000 beat the record. There's a lot of difference between 35 times earnings and 21, the previous record, so sometimes they break out to an astonishing degree. Now, the bad news is that changes nothing—they go back, even more, and longer, and they go back to where they came from.
And the higher they go, the harder and longer they fall. But it changes everything when you're there. When you're having a bubble, it's really advisable to have the bubble be in one focused area. In 2000, for example, it was US growth stocks. It was not global, and real estate was really cheap, as in cheaper than the cost of building the building.
You could buy real estate for bonds. Bonds were really cheap, and inflation-protected bonds had just come out, and they yielded 4.2%, 4.3%. I mean, can you believe it? Real return guaranteed against inflation. The story of Japan’s market collapse serves as a stark reminder of how irrational exuberance can blind even the most experienced investors.
It’s easy to get swept up in the optimism of bull markets, where gains seem endless and valuations lose touch with reality. Grantham’s point about Salomon Brothers pushing for even higher earnings multiples during Japan’s bubble sounds almost absurd in hindsight, yet it underscores a key lesson: even the experts can get it wrong when greed overtakes reason.
This is where the danger lies in bubbles like the GameStop frenzy or the Pets.com saga of the early 2000s. These speculative episodes aren’t isolated—they’re part of a larger behavioral pattern. When we see assets rising rapidly without clear fundamentals behind them, it’s a sign of mania. And as history shows, the higher they go, the further they have to fall.
In the aftermath, as Grantham highlights, it’s often the small investors, driven by media hype, who suffer the most. The bigger question is: how do we learn from these patterns? Studies from behavioral finance have consistently shown that humans are hardwired to make irrational financial decisions, especially when emotions run high.
But knowing this, we have the tools to better prepare. Diversification, understanding real value, and maintaining a long-term perspective can help shield us from the fallout. The collapse may be inevitable, but being grounded in reality is the best defense against losing everything when the bubble bursts.
So there you have it. Make sure to hit that subscribe button because it is my goal to make you a better investor by studying the world's greatest investors. Talk to you again soon.
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