A bear market rally is one of the common features of historical superbubbles.

True if the historical record of superbubbles Grantham cites (e.g. US 1929, Japan 1989, US 2000, US housing 2006) shows that a substantial bear market rally (a sharp temporary rebound after the first decline) occurred in most of them, as of August 2022. Mostly true if it occurred in most but with small differences in size or timing from how it is described. Mixed if it occurred in about half. Mostly false if it occurred in only one or a few, so that one episode is stated as a common feature. False if no such rallies occurred in the superbubble declines.

Set before the research began.

1. E1 Wall Street crash of 1929 Wikipedia

   “bear market rally) of 294.07 on April 17, 1930. The Dow then embarked on another, much longer, steady slide from April 1930 to July 8, 1932, when it closed at 41.22”

2. E2 Grantham: ‘Worst is yet to come’ in superbubble’s ‘final act’ Citywire Pro Buyer · 1 September 2022

   “GMO founder Jeremy Grantham said mid-June through mid-August stock gains were a typical bear market rally that all previous superbubbles have seen.”

3. E3 Entering the Superbubble’s Final Act GMO Own record

   “In 2000, the NASDAQ (which had been the main event of the tech bubble) recovered 60% of its initial losses in just 2 months.”

4. E4 Entering the Superbubble's Final Act GMO Own record

   “This in all three previous cases recovered over half the market's initial losses, luring unwary investors back just in time for the market to turn down again, only more viciously, and the economy to weaken.”

5. E5 Entering the Superbubble's Final Act GMO Own record

   “In 2000, the NASDAQ (which had been the main event of the tech bubble) recovered 60% of its initial losses in just 2 months.”

6. E6 Wall Street crash of 1929 Wikipedia

   “The market then recovered for several months, starting on November 14, with the Dow gaining 18.59 points to close at 217.28,”

7. E7 Grantham: 'Worst is yet to come' in superbubble's 'final act' Citywire Pro Buyer · 1 September 2022

   “GMO founder Jeremy Grantham said mid-June through mid-August stock gains were a typical bear market rally that all previous superbubbles have seen.”

8. E8 IMES DISCUSSION PAPER SERIES: Extracting Market Expectations from Option Prices: Case Studies in Japanese Option Markets Bank of Japan, Institute for Monetary and Economic Studies (Discussion Paper No. 98-E-8) · September 1998

   “(iii) from June to October 1990, when the Nikkei 225 rapidly fell after a short rebound to a level temporarily below 20,000 yen.”

9. E9 The first bounce — 1991-03-18 WhyItDropped

   “From the low on 1 October 1990 to the high on 18 March 1991, the Nikkei rose 34.25% over 110 trading days”

10. E10 Bear Market Rallies: A Historical Perspective Investing.com (analysis by Scott Krisiloff) · 23 October 2014

    “In the last bear market, we experienced 10 periods that I would count as bear market rallies between the peak in 2007 and the bottom in 2009.”

Independent sources show sharp temporary rebounds after the first decline in several of the superbubbles Grantham cites. In the US after 1929, the market recovered for several months from November 1929 to a bear market rally high in April 1930, then slid much further (E7, E1). In Japan, the Nikkei had a short rebound before falling again in 1990, then rose 34% from October 1990 to March 1991 (E9, E10). An independent analysis counts ten bear market rallies between the 2007 peak and the 2009 bottom (E11). The 2000 NASDAQ rebound is supported only by GMO's own analysis (E3); independent evidence shows such rallies after 1929 (E1, E7) and in Japan after 1989 (E9, E10), and frequent rallies in the 2007-2009 bear market (E11), which E11 does not link to the housing superbubble.