Sell It All
Welcome to issue #33 of The Davem Dish. Every week I share what actually works in investing based on my 20 years of wins, losses and expensive lessons. You’ll also get my thoughts on solopreneurship and life in general because the same principles apply — keep it simple, stay consistent and focus on what matters.
This is the second issue of Receipts & Reality, a recurring series where I take a finance-world claim and put it next to the reality. If you want to build an investing process that doesn't depend on anyone else's agenda, keep reading.
On June 25th, Jeremy Grantham went on Steven Bartlett’s Diary of a CEO podcast and told millions of listeners: “This is, I think, the biggest investment bubble in American history.”
Then he told everyone exactly what to do about it. Hold zero US equities. Put 60% in non-US indexes, up to 10% in precious metals, and the rest in bonds yielding 4.5% to 5%. For good measure, he predicted Bitcoin will eventually go to zero, dwindling away “not with a bang, but a whimper.”
The next morning he sat down on CNBC’s Squawk Box and repeated the case, telling viewers that based on market value compared to GDP, with modifications, this is the most expensive stock market in American history.
Longtime Squawk Box anchor Joe Kernen wasn’t having it. He challenged Grantham’s long-running bearish record on air, the exchange got heated, and commentators spent the next week arguing over whether the old man is a prophet or a broken clock.
I think both sides missed the interesting part. So let’s pull the receipts.
The Receipts
Let’s start with the background.
Grantham co-founded GMO in Boston in 1977 and built it into a firm that managed $165 billion at its peak. He helped create one of the first index funds in the early 1970s. And his bubble calls are legendary. He steered clients away from Japanese equities and real estate before the 1989 collapse. He called the dot-com bubble (sort of). He warned about credit and housing in 2006, two years before the financial crisis hit.
The dot-com call deserves a closer look. Grantham went bearish on US tech stocks in 1997 and 1998, refusing to put client money into what he considered grotesquely overpriced equities. He was right but was also two years early, and in those two years clients watched their buddies get rich in stocks GMO refused to own, and they left in droves. Depending on which telling you read, GMO lost somewhere between a third and half of its assets under management during 1998 and 1999. One client famously called him “dangerously persuasive and totally wrong.”
Then the crash eventually came, and GMO’s forecasts proved accurate. The firm made money through 2000 to 2002 while the Nasdaq lost over 80%.
Years later, Grantham described what happened after his vindication: “None of those clients came back. Not one solitary guy.”
Being right, but early, cost him half his business, and being proven right won none of it back.
The 2007 call was his best-timed warning. He started flagging housing in 2006, and his Q1 2007 letter described the first truly global bubble spanning nearly every asset class. Then in September 2007 he wrote in Fortune that US housing was in “genuine bubble territory.” Credit markets froze that August, the S&P 500 peaked on October 9, and the crash of 2008 followed. On that one, he was off by months, not years.
Before writing him off as a permanent pessimist, or permabear of his own book title, there’s March 2009. That month, with the financial system coming apart, Grantham published a letter titled “Reinvesting When Terrified,” telling clients stocks were dramatically undervalued and it was time to buy. The market bottomed on March 9, 2009. His buy call landed at the exact low of the worst crisis in 80 years.
So let’s build the actual timing ledger. Japan: right, roughly 2 years early. Dot-com: right, 2 years early, at the cost of half his firm. Financial crisis: right, months early. 2009 bottom: nailed it. That’s the full highlight reel from five decades. Early on tops, with one near-perfect top call and one perfect bottom call.
And here’s what Grantham himself says about those two perfect calls. In the same January 2021 letter where he declared the current market an epic bubble, he wrote that coming close on the 2008 peak and nailing the 2009 low was “far more luck than I could hope for even over a 50-year career.” In that letter he also stated plainly that calling the week, month, or quarter of a top is all but impossible.
His own written assessment of his own best timing calls is that they were mostly luck, and that timing the market can’t be done.
Now the other half of the record.
In January 2021, that same letter, “Waiting for the Last Dance”, called the market a full-fledged epic bubble and one of the great bubbles of financial history. The market fell about 25% in 2022, and for a time he looked vindicated again. Then it didn’t stay down. In February 2023 he warned the market could fall as much as 50% in his worst-case scenario. Instead, the S&P 500 went on a historic run. The letter was published on January 5, 2021, and since then the index has nearly doubled, not counting dividends.
An investor who followed his advice in 2021 and went to zero US equities missed that gain. In June 2026 he’s giving the same advice again, with more conviction, on bigger platforms.
That’s the ledger — good pattern recognition, spotty timing, and a written admission that the timing can’t be done.
Now put it next to what he’s selling today.
The Reality
Grantham is selling two different products, and his track record only supports one of them.
The first product is the diagnosis: this market is historically expensive, and every great bubble in history has formed around a genuinely transformative idea. Railroads in the 1840s. The internet in the 1990s. AI today. His best point in both interviews is something can be revolutionary and still be wildly overpriced. Amazon rose more than 900% in 1998 alone, then fell 94% from its peak by late 2001, and then went on to conquer the retail world. The company was transformative but the price was insane early on. Both things can be true at once.
That’s a pattern claim. It’s checkable, historically grounded, and genuinely useful.
The second product is the prescription: sell all your US stocks now. That’s a prediction, and it carries a timing signal his own framework can’t provide. Listen to his actual words on the podcast when Bartlett pressed him on when the collapse comes: “it would be compatible with history for the peak to be very soon.”
Compatible with history? It was also compatible with history in 2021, and in 2023, and the market roughly doubled anyway. And remember, this is the man who wrote in 2021 that calling the peak is all but impossible and that his own best calls were mostly luck. His written analysis and his television advice cannot both be right. If timing the peak is impossible, then “sell everything now” is a guess. Greenspan’s “irrational exuberance” warning in December 1996 was compatible with history too. The market more than doubled over the next three years, and when the crash finally bottomed in October 2002, the S&P still sat above where it traded the day he said it. The most famous overvaluation warning ever issued was never wrong. It just never told anyone what to do or when. I covered this in my overvaluation issue back in March, and Grantham is the same story with a longer resume: valuation is a description, not a strategy.
https://www.davemadvisors.com/newsletter/market-overvalued
And then there’s the public document Grantham’s own firm files with the SEC every quarter.
While Grantham was on television telling retail investors to hold zero US equities, GMO’s most recent 13F filing (dated March 31, 2026, filed May 14) shows the firm holding roughly $39 billion in US stocks. The top five positions: Microsoft, Alphabet, Johnson & Johnson, Apple, and Meta. Amazon and Broadcom sit just below them. And during that same first quarter of 2026, the filing shows GMO adding to Microsoft, Broadcom, and Salesforce.
The firm co-founded by the man calling this the biggest bubble in American history spent the first quarter of 2026 buying more Microsoft and Broadcom.
Now, to be fair, The Diary of a CEO episode carries a disclaimer stating the views are Grantham’s and not GMO’s. He’s the chairman and long-term strategist, not the portfolio manager placing trades, and a 13F only captures US long equity positions, published up to 45 days after quarter end, with the trades behind it made anywhere in the quarter a slice of the firm’s total portfolio. By the time Grantham sat down for interviews, that snapshot was almost three months old, and some of the trades in it could have been nearly six. I can’t see inside GMO.
What the public record does show: as of the firm’s latest filing, GMO held roughly $39 billion in US stocks and added to three of them during the quarter. Nothing in its filings or public strategy materials points to any GMO fund moving toward the zero-US-equities allocation Grantham recommended to everyone listening.
And Grantham himself explained why, probably without meaning to. On the podcast, he made the point that investment firms rarely tell clients to exit overheated markets because the incentives punish it, citing GMO’s own near-death experience in 1999. Bartlett summarized it, “if you fight a bubble, you lose a lot of business.” What Grantham didn’t say is that the same incentive analysis applies to the 87-year-old on the promotional circuit. Bears get booked when markets are scary. Networks monetize the warning and the mockery of the warning, sometimes in the same hour. Kernen’s combativeness and Grantham’s doom both drive the engagement that keeps the lights on at CNBC. Neither man on that set was a neutral party, and neither one told you that.
Why This Matters for You
Grantham is a strong test for prediction-based investing. Sixty years of experience. Three bubbles identified before they burst. No apparent fraud, no pump-and-dump, and a man who has given most of his fortune to environmental causes. If anyone has earned the right to say “sell, the top is near,” he’s one of them.
And even for him, the approach crippled his firm, cost his clients years of returns, and produced advice that his own colleagues don’t seem to follow. The 1998 lesson of being early and being wrong are indistinguishable while you’re living through them. Grantham survived being two years early because he had a firm, institutional patience, and a reputation built over decades. You probably don’t have those. If you sold everything in January 2021 on his call, you had no way to know for the next five years whether you were early or just wrong, and either way you sat out a market that doubled.
My answer to Grantham on CNBC is the same as my answer to Ron Baron last issue, even though the two men are making opposite arguments. Baron wants you to buy his conviction. Grantham wants you to sell on his. Both are asking you to substitute their judgment instead of your process, and both have incentives, entry points, and time horizons that are not yours and may never be.
It’s worth taking what Grantham is saying seriously. Markets are expensive by most historical measures. The stocks that ran the hardest tend to fall the hardest when narratives turn. Great technologies produce terrible investments at the wrong price. All true, useful, and fully compatible with my process already.
What a rules-based exit gives you is something no forecaster can. You don’t need to know if Grantham is right this time. If he’s right and the market rolls over, my trailing stops trigger, I keep the bulk of my gains, and I redeploy at lower prices. If he’s wrong and the market runs another 40%, my stop order rides up with it and I’m still making money and not wondering “what if?” Last week I wrote about taking chips off the table when positions have run up, and about what some companies are doing to not repeat the dot-com bust. The mechanics haven’t changed. Protect the gains with price rules, not predictions, and let the market settle the talking heads debate without your portfolio riding on the outcome.
Grantham has spent sixty years studying patterns, with great success. But when the cameras turn on, the patterns become predictions, and predictions are the one thing his own history proves nobody can time.
Cheers,
Andrew
This is the second issue of Receipts & Reality — a recurring series where I take a finance-world claim and put it next to the actual numbers.
Issue 1 was a famous fund manager. This issue was a famous forecaster. Next up is a Nobel Prize winner. What will the receipts say? Make sure you’re subscribed for the first look.
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