Name: Stop Ruining My Perfectly Good Bear Market | TCAF 226
Uploaded: 2026-01-23T14:00:16+00:00
Duration: 5057 s

Speakers

Jeremy Grantham — GMO co-founder and long-term investment strategist

Michael Batnick — Managing Partner, Ritholtz Wealth Management

Josh Brown — CEO, Ritholtz Wealth Management

Summary

Jeremy Grantham joins Josh Brown and Michael Batnick to discuss his memoir, long-term investing, market bubbles, profit margins, demographics, and clean energy. Grantham argues U.S. equities and AI are in a major bubble, though he remains optimistic about geothermal, fusion, and cheap clean energy storage, while Michael Batnick notes America's long-term risk-taking culture is hard to bet against. The conversation also covers market structure, inequality, climate, and the challenges of fighting bubbles as a money manager.

Jeremy Grantham discusses his book and career as a long-term value investor.
He says U.S. equities have been overvalued for years and AI has become a great bubble.
He criticizes Nvidia/AI capex for unmonetized chip spending and says quality/monopoly premiums may be undeserved.
He expects profit margins, market structure, inequality, climate, and demographics to shape long-term risks.
He is optimistic about geothermal, nuclear fusion, and cheap solar/wind/storage.
He sees U.S. cheap natural gas/fracking as a durable manufacturing and export advantage.
Michael Batnick argues long-term U.S. optimism and risk-taking are hard to bet against.
The hosts and guest also discuss market structure, retail speculation, and career risk in bubble markets.

Ideas

Jeremy Grantham GMO co-founder and long-term investment strategist 4:52

U.S. equities remain a valuation bubble.

Grantham argues the U.S. equity market has spent years far above normal valuations and several years in bubble territory, so the long bull market is not a healthy reset but a stretched condition vulnerable to mean reversion; the AI-driven interruption delayed rather than cured the prior bear market.

Michael Batnick Managing Partner, Ritholtz Wealth Management 46:42

Long-term U.S. equities hard to bet against.

Despite high valuations, America's culture of optimism, risk-taking, and funding early-stage companies makes the long-term U.S. growth and equity market hard to bet against.

Jeremy Grantham GMO co-founder and long-term investment strategist 47:47

AI is a great bubble.

AI is a genuinely world-changing technology, but that does not prevent it from becoming a great bubble: it is obvious, overhyped, and meets the classic conditions of a major speculative excess, so investors should avoid chasing the AI theme at bubble valuations.

Jeremy Grantham GMO co-founder and long-term investment strategist 49:18

Nvidia AI-chip spending is unmonetized.

Nvidia's stock is not a bubble because of its P/E alone; the real bubble is that customers have bought millions of expensive AI chips and have not yet earned a return on them, making NVDA and the AI capex cycle vulnerable to disappointment.

Jeremy Grantham GMO co-founder and long-term investment strategist 61:32

Quality monopoly premium may mean-revert.

Profit margins and quality/monopoly stocks have been structurally boosted by rising industry concentration and dormant antitrust enforcement; quality has earned an undeserved premium, so high-quality monopoly-like equities are vulnerable to mean reversion if competition policy or regulation changes.

Jeremy Grantham GMO co-founder and long-term investment strategist 72:27

U.S. natural gas has durable advantage.

The U.S. fracking revolution has given American manufacturers a durable cost advantage through cheap natural gas, supporting domestic chemical and plastics production and LNG export infrastructure; this is a significant, persistent edge for U.S. natural gas and related downstream assets.

Jeremy Grantham GMO co-founder and long-term investment strategist 74:19

Geothermal could be next fracking breakthrough.

Geothermal energy could be the next fracking-like breakthrough: transferring drilling skill and capital to capture subsurface heat could provide vast, effectively inexhaustible clean power, and Grantham's foundation is already investing in the area as funding begins to perk up.

Jeremy Grantham GMO co-founder and long-term investment strategist 76:04

Fusion is probable, but timing uncertain.

Nuclear fusion has progressed far faster than expected and is now more than possible, perhaps probable; while commercial timing remains uncertain, it is an important clean-energy technology worth monitoring.

Jeremy Grantham GMO co-founder and long-term investment strategist 76:59

Clean energy and storage keep getting cheaper.

Solar, wind, and especially energy storage costs have fallen far more than forecast and should continue dropping, with storage particularly underestimated for many consecutive years; cheap, abundant clean energy plus storage is a powerful long-term bullish theme.

Stop Ruining My Perfectly Good Bear Market | TCAF 226

Summary

Ideas

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