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While markets are not yet in bubble territory, Jeremy Grantham warns that they are getting closer. He does not believe that imminent interest rate hikes will halt the market's ascent.
To break the march toward what he termed “bubbleland,” we’ll have to wait until merger activity reaches “more of a frenzy” and individuals “become crazy buyers,” Mr. Grantham said. But for now, individuals are buying a normal amount of shares, and no bubble has ever broken until individuals pour into the market, he said. Mr. Grantham’s calls are widely watched in part because the firm’s money managers don’t have a reputation for being perma-bulls or perma-bears. He was early in predicting the financial crisis and then reversed course before markets started rebounding in 2009.
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