A Permabear Strikes Back

At the end of July, I wrote an article, “Jeremy Grantham Knows Nothing,” providing an update on the high-profile bear whose crash call I’ve followed all year.

person using MacBook Pro on table

Image Source: Unsplash

His initial forecast was for the stock market to collapse in spring. When that failed to materialize he changed the schedule to this fall, warning that the trigger “could be a virus problem, it could be an inflation problem, or it could be the most important category of all, which is everything else that is unexpected.”

To make fun of his rescheduling, I revisited his forecast and pointed out the folly of forecasting in general, and the superiority of my Signal System, which requires no forecasting. Of his above “forecast,” I wrote:

“In other words, Grantham doesn’t know what or when. He has a general idea that the market has been going up and will one day go down, but did you need a big kahuna to tell you that?”

He also said:

“Bubbles are unbelievably easy to see; it’s knowing when the bust will come that is trickier.”

Following which, I wrote:

“Full stop. That knowing when the bust will come is everything. If it can’t be known, then the seeing of a bubble was merely conjecture and ultimately irrelevant. Does anybody mind a bubble that doesn’t go bust? In Years Two and Three of such a bubble, would anybody be happy to have gone to the sidelines in Year One because Grantham had no trouble seeing the bubble? Of course not.”

This installment is not about Grantham but about the resurfacing of an old nemesis of mine, RJM Consulting, in response to my Grantham article. The head of this firm, who once worked at a major credit rating agency, has predicted the spectacular implosion of my Signal plans for the past seven years. He went ballistic when I upped the ante from my “over committed” 3Sig plan to my leveraged 6Sig plan then—Katy bar the door—my 3x leveraged 9Sig plan. It would be the death of me, he promised.

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You can learn more about the way I use leveraged ETFs in The Kelly Letter at jasonkelly.com

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