Claims

Prediction · Economics and markets

“The forecast for the S&P 500 is well below 3%, but the high-quality subset is still handsome.”

Jeremy Grantham, GMO letter author · October 2009 · Jeremy Grantham GMO letter 3Q 2009: Just Desserts and Markets Being Silly Again (Scribd)

This quote could not be matched word for word to the source page.

GMO's seven-year forecast return for the S&P 500 is well below 3%, while the high-quality subset is still handsome.

Resolved false The record shows it did not happen or was not so.

The second judge would not resolve this claim; the verdict shown is the first judge's.

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

What would count as true or false

Judged at about October 2016, using realized annualized real total returns from October 2009 to October 2016, with 'well below 3%' taken as below about 2% real a year and 'handsome' as clearly high, at least about 6% real a year. Two parts: (a) the S&P 500 and (b) the high-quality subset (GMO's quality definition or a comparable US high-quality index). True: both hold. Mostly true: both broadly hold but one misses its threshold narrowly (for example S&P between 2% and 3%, or quality between 5% and 6%). Mixed: one part holds and the other clearly fails. Mostly false: the S&P 500 returned 3% or more real while quality was handsome only marginally, or both parts miss narrowly. False: the S&P 500 returned well above 3% real and/or the quality subset did not clearly beat it.

Evidence

1. Jeremy Grantham: Predictions & Track Record predictionscorecard.com · 20 October 2009

   “This places today's market (October 19) at almost 25% overpriced, and on a seven-year horizon would move our normal forecast of 5.7% real down by more than 3% a year.”

2. Jeremy Grantham: Predictions & Track Record predictionscorecard.com · July 2010

   “This is reflected in our seven-year forecasted difference of 7.3% for high quality and 1.1% for the rest of the S&P 500, compounded over seven years as of June 30.”

3. S&P 500 Historical Prices by Month multpl.com (monthly S&P 500 price table; sources credited as Standard & Poor's and Robert Shiller) · 5 November 2026

   “| Oct 1, 2009 | 1,067.66 |”

4. S&P 500 Historical Prices by Month multpl.com (monthly S&P 500 price table; sources credited as Standard & Poor's and Robert Shiller) · 5 November 2026

   “| Oct 1, 2016 | 2,143.02 |”

5. Consumer Price Index News Release U.S. Bureau of Labor Statistics · 18 October 2016

   “Over the last 12 months, the all items index rose 1.5 percent”

6. S&P 500 Returns by Year: Annual Total Return Table (1928–2026) | ChartRow ChartRow · 4 November 2026

   “| 2016 | $203.87 | $223.53 | chart → | 2.4% | +12.0% |”

Reasoning

E2 records GMO's October 2009 statement that overpricing would move its normal 5.7% real seven-year forecast down by more than 3% a year, and E3 records a July 2010 forecast, as of June 30, of 1.1% for the non-quality S&P 500 and 7.3% for high quality. The multpl monthly S&P 500 price table shows the index at 1,067.66 in October 2009 (E7) and 2,143.02 in October 2016 (E8), roughly a doubling, or about 10.5% a year in price alone before dividends. The S&P 500 price index rose from 1,067.66 in October 2009 to 2,143.02 in October 2016 (E7, E8), about 10.5% a year before dividends, and CPI rose 1.5% over the 12 months to September 2016 (E9). E9 covers only one year of the window, but on this evidence the S&P 500's real annualized return appears to have been well above 3%, so the claim fails under the criteria regardless of how the quality subset performed.

Cite this claim

Jeremy Grantham, “GMO's seven-year forecast return for the S&P 500 is well below 3%, while the high-quality subset is still handsome.” (said October 2009). Verdict: resolved false. Reliability API, claim c_e1f9ffc807ca, method 0.1.0+28da144b. https://epistacklabs.com/claims/c_e1f9ffc807ca