Episode summary
Billionaire's WARNING: I'm SELLING Everything. The Crash Is Already Here!
The Diary of a CEO
· · 1 hr 46 min · Hosts: Steven Bartlett · Guests: Jeremy Grantham
Summary
Jeremy Grantham argues that the market is in a historic AI-driven bubble and that the safest response is to reduce exposure to US equities, especially high-flying technology names. He says the biggest winners could fall sharply, with a 70% decline in some stocks not being unexpected, and he warns that advisers and big firms will not tell clients to get out because it is bad business for them. Instead, he recommends a diversified portfolio with non-US equities, bonds, cash, a small amount of precious metals, and some real estate if practical.
He also says house prices are still too expensive relative to incomes and could need to fall 30% before they become healthier, even then remaining elevated by historical standards. More broadly, he ties today’s market risk to long-running bubbles, citing Japan, the dot-com era, and the tendency for people to overpay for transformative ideas.
Grantham extends the warning beyond markets to social stability, arguing that inequality in the US has become extreme and that the political and economic environment is becoming harder to manage. For younger listeners, his practical advice is to learn AI deeply, take risk, and build useful skills, while also preparing for a more turbulent world.
Key takeaways
- Grantham says the AI boom is the biggest investment bubble in American history and thinks a peak could come soon.
- He recommends owning non-US equities, plus bonds, cash, and 5% to 10% in precious metals rather than concentrating in US stocks.
- He warns that the highest-flying AI stocks could fall 70%, with past bubbles like Nasdaq in 2000 showing even larger drawdowns.
- He thinks US equities are badly overpriced and says he is not confident they will be intact in 5 or 10 years.
- He says house prices may need to fall 30% and remain expensive even after that, especially relative to incomes.
Notable quotes
“Don't own US stocks. That's a simple strategy that you can act on”
“the biggest investment bubble in American history”
“From these unprecedented levels a 70% decline would not be unexpected”
“you have to remember the tech bubble the Nasdaq, which is an index of the growth stocks, came down 82%”
“I think the simple appeal would be to get your tail into AI and and try and be a leader”
How the episode opens
What advice do you give for the average person that's looking to invest their salary or their wages? — Don't own US stocks. That's a simple strategy that you can act on. — But what about S&P 500? — No. — Really? — Yeah. And if you have a big position in US technology stock, I personally advise would be to sell them all.
But I'm an investor in SpaceX. — Good luck. SpaceX is such a fabulous uh story, and we can go into that. — Crypto? — No. — Why? — It's an unnecessary piece of nonsense that facilitates nothing except criminals moving money that they can't be seen.
Do you think Bitcoin's going to go to zero? — Yes, it will certainly go to zero. — So, how many years have you spent investing? — 60 years. — And what's the most amount of money you've ever managed of other people's money?
165 billion. — And one of the things you're famous for talking about is this idea of bubbles.
Yes. And bubbles always occur around the very most important ideas. So, the railroads, everyone could see that it would change the world.
The same with the internet. And everyone wanted to put their money in, and so they over invested. But this is the problem.
Eventually, they burst. And if you look at the great bubbles breaking of the past, you find that it's followed by really tough times, a miserable period for the economy. And the bigger the bubble, the bigger the burst.
And now we're in the biggest investment bubble that arguably has ever occurred, AI.
Are we on the verge of a collapse with AI in the coming years? — The next few days, the next few weeks, the next few months, but certainly the next few years.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai bubble
- portfolio protection
- house price crash
- fertility toxic chemicals
- investment strategy
Companies and tickers mentioned
- GMO
- Grantham Foundation for the Preservation of the Environment
- SpaceX
Watch the episode
Watch “Billionaire's WARNING: I'm SELLING Everything. The Crash Is Already Here!” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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The Diary of a CEO, this episode and its artwork belong to DOAC. Octagon is not affiliated with the show; this page is an independent summary.
