Market Perspective · June 29, 2026
Jeremy Grantham Might Be Right: Why You Don’t Score Market Cycles in the Fifth Inning
On the most expensive market in American history, the AI trade, and why you don't score the game in the fifth inning.
Last Friday on CNBC, investor Jeremy Grantham said this is the most expensive stock market in American history. CNBC anchor Joe Kernen pushed back hard. The clip went viral.
Before you take sides, look at the scorecard.
On January 5, 2021, Grantham published “Waiting for the Last Dance” through GMO and made a specific call: out of U.S. growth, into global value and emerging markets. Here’s what happened next.
The Scorecard: $10,000 Invested January 1, 2021
Sources: iShares IWF (Russell 1000 Growth ETF), MSCI World Value Index, MSCI Emerging Markets Index. 2026 YTD through late June.
| Year | Growth Return | Value Return | EM Return | $10k Growth | $10k Value |
|---|---|---|---|---|---|
| 2021 | +27.4% | +21.9% | −0.3% | $12,743 | $12,194 |
| 2022 ▼ | −29.3% | −6.5% | −19.8% | $9,008 | $11,399 |
| 2023 | +42.6% | +11.5% | +11.7% | $12,845 | $12,711 |
| 2024 | +33.1% | +11.5% | +7.1% | $17,100 | $14,169 |
| 2025 | +18.3% | +20.8% | +31.4% | $20,234 | $17,115 |
| 2026 YTD | +0.9% | +10.6% | +21.0% | $20,410 | $18,924 |
| Total Return | +93% | +70% | +51% | $20,410 | $18,924 |
Growth wins — +93% cumulative. Kernen's scoreboard is correct.
But look at 2022. Growth crashed to $9,008 — below the starting investment. Value held at $11,399. To recover from a 29% loss you need a 41% gain just to get back to even. Value only needed 6%.
Growth's entire margin came from 2023 and 2024 — two AI-driven years. The gap between growth and value is now $1,486. Value and EM have outperformed in 2025 and 2026. The gap is closing.
We are in the fifth inning.
Who Is Jeremy Grantham?
Co-founder of GMO, a Boston-based institutional asset manager, and fellow South Coast of Massachusetts fan. Called the Japanese bubble in 1989, dot-com in 2000, housing in 2008. Early on all three. Right on all three.
Who Is Joe Kernen?
Co-anchor of CNBC's Squawk Box. On June 26 he pressed Grantham on his track record — pointing out that cautious investors had significantly underperformed. He's not wrong. But he's scoring the game in the fifth inning.
What Grantham Said in 2021
His call was not cash. It was a rotation trade.
We believe it is in the overlap of these two ideas, Value and Emerging, that your relative bets should go, along with the greatest avoidance of U.S. Growth stocks that your career and business risk will allow.
Investors who followed that weren't sitting out. They were in the market, positioned differently.
On Timing
This definition of success absolutely does not include precise timing. Predicting when a bubble breaks is not about valuation… Calling the week, month, or quarter of the top is all but impossible.
He wrote that in January 2021. GMO exited Japan three years early, underperformed painfully, and made good money on the full round trip. Being early is not the same as being wrong.
Why the Hostility?
Every time someone questions the AI trade — the valuations, the concentration, the assumption that current enthusiasm extends indefinitely — they get the Kernen treatment.
It's not about Grantham's track record. It's about protecting a crowded position.
Grantham noted in 2021 that rising hostility toward bears is a classic late-stage bubble signal. He's watching it happen again.
Japan 1989. Dot-com 2000. Housing 2008. He called all three. He was early. He was right.
This is the most expensive market in American history. The fifth inning is not the final score.
Wait for the game to end before you pile on Jeremy Grantham.
Tim Hayes is an independent financial advisor with an office in Dartmouth, MA, serving Massachusetts public employees, teachers, and educators. This post is for educational purposes and does not constitute investment advice.