Claims

Factual · Economics and markets

“Superbubbles are events unlike any others: While there are only a few in history for investors to study, they have clear features in common,”

Jeremy Grantham, GMO cofounder, research note · 31 August 2022 · Jeremy Grantham: superbubble hasn't popped yet (Fortune)

Few superbubbles exist in history to study, and they share clear common features.

Mostly true True in substance, wrong in a detail.

The second judge said mostly false; the verdict shown is the first judge's.

The evidence is the person's or their organisation's own records.

Said for an organisation they lead or work for; it counts on both records.

What would count as true or false

True: GMO's published research or credible historical analyses of asset bubbles identify only a small number of 'superbubbles' (about a handful, e.g., US 1929, Japan 1989, US 2000, US housing 2006). They also document clear common features across them, such as extreme valuations (around 3-sigma), price acceleration and broad euphoria. Mostly true: both points are supported, but definitions or the count vary somewhat. Mixed: they are agreed to be rare, but the common features are disputed or not clearly documented (or the reverse). Mostly false: the 'clear common features' are asserted without supporting analysis. False: the evidence shows superbubbles are common, or that they share no common features.

Evidence

1. ENTERING THE SUPERBUBBLE’S FINAL ACT GMO (Jeremy Grantham Viewpoints) · 31 August 2022 Own record

   “These superbubbles are events unlike any others: while there are only a few in history for investors to study, they have clear features in common.”

2. LET THE WILD RUMPUS BEGIN* GMO (Jeremy Grantham Viewpoints) · 20 January 2022 Own record

   “All 2-sigma equity bubbles in developed countries have broken back to trend. But before they did, a handful went on to become superbubbles of 3-sigma or greater: in the U.S. in 1929 and 2000 and in Japan in 1989. There were also superbubbles in housing in the U.S. in 2006 and Japan in 1989.”

3. LET THE WILD RUMPUS BEGIN* GMO (Jeremy Grantham Viewpoints) · 20 January 2022 Own record

   “Previous equity superbubbles had a series of distinct features that individually are rare and collectively are unique to these events. In each case, these shared characteristics have already occurred in this cycle.”

4. Asset Price Bubbles: What are the Causes, Consequences, and Public Policy Options? Federal Reserve Bank of Chicago (Chicago Fed Letter) · November 2012

   “Additionally, evidence suggests that bubbles are not “black swan” events; they occur relatively frequently.”

5. Entering the Superbubble's Final Act GMO (Jeremy Grantham Viewpoints) · 31 August 2022 Own record

   “At the peak, the economy always looks near perfect: full employment, strong GDP, no inflation, record margins. This was the case in 1929, 1972, 1999, and in Japan (the most important non-U.S. superbubble).”

6. Let The Wild Rumpus Begin GMO (Jeremy Grantham Viewpoints) · 20 January 2022 Own record

   “But market extremes do not stop at 2-sigma. I define a superbubble as a 3-sigma event.”

7. Bubbles, Credit, and Their Consequences (FRBSF Economic Letter 2016-27) Federal Reserve Bank of San Francisco · 12 September 2016

   “About two-thirds of all postwar recessions, 41 out of 65, are associated with bubble episodes.”

8. Asset Price Bubbles: What are the Causes, Consequences, and Public Policy Options? Federal Reserve Bank of Chicago (Chicago Fed Letter) · 1 January 2026

   “Additionally, evidence suggests that bubbles are not “black swan” events; they occur relatively frequently.”

9. Let The Wild Rumpus Begin* GMO · January 2022 Own record

   “a handful went on to become superbubbles of 3-sigma or greater: in the U.S. in 1929 and 2000 and in Japan in 1989. There were also superbubbles in housing in the U.S. in 2006 and Japan in 1989.”

10. Let The Wild Rumpus Begin* GMO · January 2022 Own record

    “Previous equity superbubbles had a series of distinct features that individually are rare and collectively are unique to these events. In each case, these shared characteristics have already occurred in this cycle.”

11. Leveraged Bubbles - San Francisco Fed Federal Reserve Bank of San Francisco (working paper by Jordà, Schularick and Taylor) · 1 August 2015

    “History shows that not all bubbles are alike. Some have enormous costs for the economy, while others blow over.”

12. [PDF] A New Chronology of U.S. Asset Price Bubbles, 1825-1929 Matthew J. Botsch (Bowdoin College) and Andrew J. Jalil (Occidental College); AEA conference paper · 31 December 2018

    “Our chronology contains many historical asset price bubbles that are largely forgotten today”

Reasoning

The criteria accept GMO's own published research as a source. That research defines a superbubble as a 3-sigma event (E6) and names only a handful: US equities in 1929 and 2000, Japan in 1989, and housing in the US in 2006 and Japan in 1989 (E2, E9). It also says past superbubbles shared distinct features (E3, E10, E5), but these passages state the features without showing the data behind them, and they come only from the subject. The independent sources say ordinary bubbles happen fairly often (E4, E7), that many historical bubbles exist (E12), and that bubbles differ from one another (E11), but none of them speaks to the 3-sigma superbubble category or contradicts its rarity, so both parts of the claim are supported, with some looseness in the definition and the evidence.

Cite this claim

Jeremy Grantham, “Few superbubbles exist in history to study, and they share clear common features.” (said 31 August 2022). Verdict: mostly true. Reliability API, claim c_d28d28455cf3, method 0.1.0+28da144b. https://epistacklabs.com/claims/c_d28d28455cf3