Calling a Super Bubble: Front Row With Jeremy Grantham

[bucolic_frolic]

4. Investing at the top is the worst of all strategies

and decades of data identifies periods of slow, no, or declining markets. Avoiding the worst markets is a matter of very few decisions.

The S&P INDEX graph you post is essentially 3 periods of sideways movement, 1929-1956, 1968-1982, and 2000-2014, interspersed with 3 periods of sharp upward advances, 1956-1968, 1982-2000, and 2015-2020.

So timing becomes a matter of probabilities. After a period of sharp advance, markets pause or go down for awhile. After periods of sideways movement, markets go up for awhile. Grantham plays a game of probability, and eventually his strategy pays off. It's like clockwork. The resource depletion he cites will have challenges, and may well be a component of the next period of, guess what, sideways movement.