By Sam Boughedda
Jeremy Grantham warned investors that they shouldn't get too excited about the strong start from stocks this year as the popping of the U.S. stock market bubble is not yet over.
Bloomberg reported Tuesday that Grantham, the co-founder and long-term investment strategist of GMO, said in a paper that he calculates that the value of the S&P 500 at the end of the year should be around 3,200, representing around a 20% decline from current levels.
In an interview from Boston, Grantham is said to have commented that there is a range of problems greater than usual and "maybe as great as I've ever seen."
Grantham, a well-known Wall Street bear, was quoted as saying, "there are more things that can go wrong than there are that can go right," and there is a "definite chance" that things could go wrong and that we "could have basically the system start to go completely wrong on a global basis."
He even goes on to state that there's a possibility the benchmark index could experience a "brutal decline" and fall to around 2,000.
Grantham added that while the first and "easiest" leg of the bubble's bursting is over, the next phase will be more complicated.