Jerermy Grantham Expects S&P Crash

S&P To Rally Above 2,250 Before Election Collapse: Pro


Wall Street Pit








GMO’s Jeremy Grantham believes the bull market won’t end before the S&P 500 SPX tops the 2,250 level.


In his latest quarterly letter to shareholders, Grantham, who predicts the market will start collapsing around or after the 2016 presidential election, notes that this year probably will be tough for stock investors until October.

[_{via MW}]“But after October 1, the market is likely to be strong,” especially through April 2015, he writes. Perhaps by the time of the November 2016 election, the S&P 500 will have rallied past 2,250, maybe by a decent margin, according to Grantham.



But then “around the election or soon after, the market bubble will burst, as bubbles always do,” Grantham writes. The stock market “will revert to its trend value, around half of its peak or worse, depending on what new ammunition the Fed can dig up.”


The S&P was at 1,881 on Friday. According to Grantham, whose  2,250 SPX level-forecast suggests a 20% upside, the Index is already 65 percent overvalued.

Most Experts Predict Market Crash

Wall Street: 98% Risk of Crash This Year

Money News








Earlier this year, a select group of Wall Street Insiders were surveyed, and the results were ominous. These financial experts and fund managers predicted a 98% chance a stock market crash will happen in the next six months.

Gary Shilling, one of Wall Street’s top economists, says the S&P Index could drop as low as 800, a 42% decline.

Jeffrey Gundlach, one of the world’s biggest bond fund managers and CEO of DoubleLine Capital, says the real damage is yet to come and an “ominous third phase” will “far exceed the damage of 2008.”

And Euro Pacific Capital CEO Peter Schiff, author of “The Real Crash: American’s Coming Bankruptcy,” warns, “I am 100% confident the crisis that we’re going to have will be much worse than the one we had in 2008.” 

Even billion-dollar investor Warren Buffett is rumored to be preparing for a crash as well. The “Warren Buffett Indicator,” also known as the “Total Market Cap to GDP Ratio,” is breaching sell-alert status and a collapse may happen at any moment.

So with an inevitable crash looming, what are Main Street investors to do?

 




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