Despite the abundance of economic, political, social and ecological problems, the stock markets are celebrating record highs. The irrational mood encourages particularly bold speculation.
May 7, 2026, 9:17 p.mMay 7, 2026, 9:18 p.m
New York Stock Exchange (NYSE) on Wall Street. Three weeks ago, the first US industrial company in three decades dared to go public.Image: IMAGO / UPI Photo
“We are in the biggest stock bubble of all time.” Hardly a day goes by without a video interview with stock market veteran Jeremy Grantham popping up somewhere in which he gives his gloomy analysis of the current state of the financial markets as dryly and humorlessly as a tax return. The 87-year-old Brit is a “permabear,” as he describes himself in his autobiography*, published in January.
Unlike permafrost, permabears thaw when stock market temperatures cool and freeze when the thermometer rises above a certain point. But Jeremy Grantham always appears in the media as an alarmist. Warning is part of its business model. The man is a value investor. As head of investment at the fund company GMO, which he co-founded in 1977 and based in Boston, USA, Grantham is constantly looking for stocks whose intrinsic value is higher than the stock market price. This made Grantham rich and famous. But experience has shown that imitation is rarely worthwhile.
You can still learn a lot from old masters like him. Grantham said in one of the many interviews, a An indicator of a stock market bubble is when the prices of old economy stocks like Coca-Cola suddenly rise faster again as the high-flyer stocks of the new digital economy. That would be a sign that investors are no longer dancing on the trading floor because they feel like celebrating, but just because the music keeps playing.
Of course, the remark wasn’t made out of thin air: for six months, Coca-Cola shares have risen by 15 percent, well ahead of Nvidia (1 percent), Apple (5 percent), Meta, formerly Facebook, (-2 percent) or Amazon (12 percent) and other super stocks that have set the pace of the world stock exchanges for years. Grantham says the problem is not the digital companies’ business models, but the amount of money that has been invested there.
Jeremy Grantham is co-founder and chief strategist at investment firm GMO in Boston.Image: https://groveatlantic.com/author/jeremy-grantham/
Back in the Victorian era, when the great railway boom began in England, no fewer than six different lines were planned between the two industrial cities of Manchester and Leeds, Grantham quotes from history in an interview with the British newspaper “Telegraph”. “All that was needed was one line. Even two wouldn’t have been a disaster. But if there are more, all investors will lose their money, even those who invested first. And they lost it.”
Harmless grizzly
Maybe the Coca-Cola share thing is just a coincidence. However, other strange things can also happen in the current stock market situation Observe trades that are extremely speculative, if not even manipulative, in nature, which fits Grantham’s bubble theory like a glove. One example was a sharp attack a week ago by the American analysis company Grizzly Research on the Zug-based investment company and asset manager Partners Group, whose shares are included in the Swiss Market Index of the most valuable companies on the Swiss stock exchange.
Grizzly alleges that Partners Group is engaging in serious mispricing of its investments in its evergreen funds open to retail investors, which poses a serious threat to the firm’s business model and its long-term financial health. Partners Group immediately defended itself: the claims were frivolous, defamatory and highly misleading.
Image: stb
Things always get that tough when a professional short seller like Grizzly targets a company. Short sellers make money when the prices of the stocks they choose fall. They therefore have an intrinsic interest in bad news. Short sellers typically have a boom in times when stock markets are overheated. When it doesn’t take much to make investors nervous. Partners Group is a hit: with its private credit commitments in a kind of shadow credit market outside the banking system, the company is additionally exposed in a business that is currently quite hot.
These are ingredients that attract short sellers. Apparently Grizzly was too sure of himself. The analysis, which one would expect from such addresses to be particularly meticulous and accurate, was “strongly constructed” and in parts “obviously false and misleading,” “Finanz und Wirtschaft” quoted two stock analysts as saying. The hoped-for price collapse did not materialize. Apparently Grizzly was just trying to get some short-term wind in order to quickly get a trade off the ground.
Final panic
The calculation with which the video game retailer Gamestop wants to finance the $56 billion takeover of eBay also seems rather superficial and somewhat manipulative. Five years after almost going bankrupt, Gamestop still doesn’t have a business model that would generate enough revenue for such takeovers. The company has this thanks to its loyal investor base, many of whom see themselves as stock market pirates a few billion dollars in cash and, above all, very highly valued stocks, that urgently need to be converted into a viable business model. You don’t need to be a perma-bear to see that closing panic has broken out everywhere on the stock market.
*«The Making of a Permabear: The Perils of Long-Term Investing in a Short-Term World», Jeremy Grantham and Edward Chancellor, Grove.