Legendary investor Grantham sounds the AI alarm: evacuate from US stocks, an epic crash is imminent.

Legendary investor and co-founder of Boston asset management company GMO, Jeremy Grantham, has once again issued a warning about market bubbles, stating that the current situation is experiencing "the biggest bubble in American history". Leading this unprecedented market boom are "artificial intelligence high-flying stocks", whose prices may experience a 70% crash. Grantham points out that unlike previous bubbles such as railways and the internet, where people could clearly see the practicality and impact of the technology, the current bubble situation is "different". Grantham bluntly stated on Steven Bartlett's podcast program, "The crazy optimistic indicators displayed by companies like SpaceX are abundant. SpaceX defines their potential market as a quarter of the global GDP." He added, "Mining asteroids, AI achieving huge success - these are wonderful stories, but classic signs of the market top, which you would see when a large bubble is about to burst." Regarding the impact of a bubble burst on the economy, Grantham said, "Those high-flying companies will lay off workers, and many will feel their wealth shrinking. When people feel poorer, they reduce consumption, putting pressure on the economy. Looking back at periods of major bubble bursts in history, they often come with extremely difficult times." How should ordinary investors allocate their assets? Grantham provided specific advice: "The first principle is to diversify investments. Allocate 60% of funds to broad-based indexes of non-US stocks - they are much cheaper and have significantly outperformed US stocks since the beginning of last year. Additionally, allocate 5-10% to precious metals such as gold and silver. If feasible and reasonable, hold a small amount in real estate, but currently real estate prices are quite expensive by historical standards. The remaining funds, I would invest in bonds." Will this "doomsday prophecy" come true this time? It should be noted that Grantham does have a track record of successfully predicting the collapse of the Japanese stock market in 1989, as well as the major declines in the US market in 2000 and 2007. However, this "perennial bear" has been consistently predicting epic crashes for almost the past decade, leading some to quote the saying, "Even a broken clock is right twice a day." Since 2021, Grantham has published an "epic crash" themed article almost every year, with titles including "Waiting for the Last Dance", "Let the Good Times Roll", "Entering the Final Chapter of the Super Bubble," and most recently "Valuation AI: An Analysis of the Tech Frenzy (Part 2)". Is this a "late" prediction, a "boy who cried wolf" story, or will the doomsday prophecy finally come true? The market is still waiting for an answer.