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The Diary of a CEOBillionaire's WARNING: I'm SELLING. The Crash Is Already Here!
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At a glance
WHAT IT’S REALLY ABOUT
Jeremy Grantham warns AI bubble and US stocks face imminent crash
- Jeremy Grantham claims the current AI-led US market is the biggest investment bubble in American history and could peak and break within weeks to years, with high-flying tech stocks plausibly falling 70% or more.
- He recommends a defensive, valuation-aware strategy: diversify across cash, bonds, modest precious metals, and favor non-US equity indices because US stocks are overpriced relative to the rest of the world.
- Grantham argues mainstream investment advisors rarely warn clients to exit bubbles due to incentive conflicts and career risk, meaning individuals must interpret the data and act independently.
- Beyond markets, he warns AI development lacks consensus on outcomes and could become dangerous without “benevolent” constraints, while competition among the Magnificent 7 may destroy monopoly-like profitability through a brutal AI arms race.
- He links social instability to rising inequality and a weakening “social contract,” then shifts to a fertility “baby bust” thesis driven by endocrine disruptors, microplastics, and pesticides—advocating detoxification policy and personal exposure reduction, especially during pregnancy.
IDEAS WORTH REMEMBERING
5 ideasTreat AI as “railroads-level” important—and therefore bubble-prone.
Grantham argues the most world-changing ideas attract the most capital and overinvestment; even winners like Amazon can drop ~90% in the bust before reshaping the economy.
If you’re concentrated in US tech/AI, consider de-risking now.
He expects the “high flyers” to fall the most in a downturn and says a 70% decline would be historically plausible, citing Nasdaq’s ~82% drawdown in 2000–02 as precedent.
Use valuation and global rotation as your compass, not recent performance.
He believes US equities are “crazily overpriced,” similar or worse than 2000 by some measures, and that leadership cycles rotate—so extrapolating US dominance is a common investor mistake.
A simple portfolio frame he endorses: non-US index + bonds + modest metals.
Grantham proposes roughly 60% broad non-US equities, 5–10% precious metals, some real estate if sensible, and the remainder in bonds—emphasizing diversification and resilience over maximizing upside.
Assume big financial institutions won’t warn you about bubbles.
He claims advisors face business-model and career-risk pressure to stay bullish; even when analysts privately see overvaluation, firms rarely tell clients to “get out,” especially during late-stage bull markets.
WORDS WORTH SAVING
5 quotesDon't own US stocks. That's a simple strategy that you can act on.
— Jeremy Grantham
And if you have a big position in US technology stock, my personal advice would be to sell it all.
— Jeremy Grantham
We're in the biggest investment bubble that arguably has ever occurred, AI.
— Jeremy Grantham
The stock price is what you think the other guy will pay.
— Jeremy Grantham
It facilitates nothing except criminals moving money, so they can't be seen.
— Jeremy Grantham
SPEAKERS
Steven Bartlett
hostEntrepreneur and podcast host of The Diary of a CEO.
Jeremy Grantham
guestVeteran investor and co-founder of GMO; founder of the Grantham Foundation for the Protection of the Environment.
High quality AI-generated summary created from speaker-labeled transcript.
