Assertion Contradicted AI assessment confidence: 88% certainty 4/5 debate potential 2/5

Grantham: Emerging market equities are at an unprecedented low relative valuation

Jeremy Grantham · Jeremy Grantham – GMO (Manager Meetings, EP.01) · Jul 8, 2021 · at 38:17

Jeremy Grantham highlights valuation disparities between US equities and emerging market stocks in mid-2021.

0:00 / 0:11exact quote · 11.9s

720p mp4 · rendered on demand · StarZero watermark

“Emerging equities, emerging markets, are not only at an unprecedented low relative, but they are actually quite cheap, absolutely, compared to the US, and on their own.”

quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →

The claim, plainly

Emerging market equities are at an unprecedented low valuation relative to the US and are cheap on an absolute basis.

a quote alone can be ambiguous, so this restates it with the references and context of the conversation around it resolved. AI-written; the tape below the player is the source.

Assessment

Jeremy Grantham's claim consists of two core assertions: that emerging market (EM) equity valuations relative to the US were at an 'unprecedented low' in July 2021, and that they were 'quite cheap... on their own' (on an absolute basis). Historical market data as of mid-2021 refutes both points: (1) In relative terms, the forward P/E discount of 30% to 35% and the CAPE discount (~60%) between the MSCI Emerging Markets Index and the S&P 500 were wide but not unprecedented; during the 2000 dot-com peak, EM traded at a significantly larger relative CAPE discount (>70%, ~10x vs. ~37x–44x), and similar forward P/E discounts had occurred repeatedly over the preceding 20 years. (2) In absolute terms, the MSCI EM 12-month forward P/E (12.8x–14.8x) and CAPE (15x–16x) in mid-2021 were near or above historical median levels (median forward P/E ~11.6x), well above historical cyclical absolute lows.

As of mid-2021, the forward P/E discount between MSCI EM (~14.8x) and the S&P 500 (~21.5x) was 30%–35%, a level reached dozens of times across the prior two decades rather than an unprecedented low.
The historical relative CAPE discount peak occurred around year-end 2000 at over 70% (~10x vs. 37x–44x), compared to roughly 60% (~15x–16x vs. 38x–41x) in July 2021.
On an absolute basis, EM 12-month forward P/E was 12.8x–14.8x against a historical median of 11.6x, and EM CAPE was ~15.6x, reflecting median valuations rather than deep absolute cheapness.

Checked against

[1] schroders.com [2] transistor.fm [3] robeco.com [4] morningstar.com [5] theemergingmarketsinvestor.com [6] sec.gov [7] sec.gov [8] liveoakprivatewealth.com

MSCI Emerging Markets vs S&P 500 relative valuation July 2021 "MSCI USA" "June 30, 2021" "trailing P/E" OR "forward P/E" OR "P/B" "July 31, 2021" "MSCI Emerging Markets" "P/E" OR "Forward P/E" emerging markets valuation discount to US July 2021 historical percentile "MSCI Emerging Markets" "CAPE" "2021" "historical" all-time low relative "S&P 500" "forward P/E" "21.2" OR "21.5" "June 30, 2021" OR "July 31, 2021" "MSCI Emerging Markets" "July 2021" "CAPE" OR "forward P/E" discount S&P 500 MSCI Emerging Markets CAPE relative to US historical all time low 2021 MSCI Emerging Markets PE ratio forward PE July 2021 S&P 500 "MSCI Emerging Markets" "S&P 500" "relative valuation" "July 2021" OR "June 2021"

assessed as of 2026-09-02

This assessment is an AI reading of a public statement, made against the cited references with the confidence shown. It can be wrong. The quote, the tape and the references are all on this page; if something is off, use report an error below. full disclaimer →

Mentioned

emerging markets United States

⚑ Spot an error? Report it

More from Jeremy Grantham

Prediction Open · timeframe Mar 2027

Grantham: The AI bubble will break, led down by Nvidia

“This is exactly where you'd expect the bubble to break, and you would expect, other things being even, that it will be let down by NVIDIA, followed closely by the other giants.”

Jeremy Grantham Mar 23, 2026 ▶ 49:01 Jeremy Grantham – Bubbles, Value Investing, and the Long Game at GMO (EP.493)

Prediction Not checkable as stated

Grantham: The market bubble will likely break in weeks or months

“So I think this is an indicator, not a certainty, but a strong possibility that we are quite close to the bubble breaking in terms of psychology. Perhaps a matter of weeks or months, not years.”

Jeremy Grantham Jul 8, 2021 ▶ 24:18 Jeremy Grantham – GMO (Manager Meetings, EP.01)

Opinion

Grantham: Goldman and JPMorgan will never tell clients to exit overpriced markets

“You will never hit a Goldman Sachs or a JP Morgan Tell you to get out of the market because it's ludicrously overpriced. Everybody knows today it's ludicrously overpriced, but no one can tell you, and they never will.”

Jeremy Grantham Mar 23, 2026 ▶ 28:53 Jeremy Grantham – Bubbles, Value Investing, and the Long Game at GMO (EP.493)

Assertion Supported

Grantham: US housing never bubbled nationwide until Greenspan and Bernanke

“The American housing market had famously bubbled in Chicago and bust in California, bubbled in Florida, etc. Never altogether until Greenspan and Bernanke.”

Jeremy Grantham Mar 23, 2026 ▶ 51:22 Jeremy Grantham – Bubbles, Value Investing, and the Long Game at GMO (EP.493)

Insight

Grantham: Endowment boards struggle to manage giant egos of wealthy PE and VC donors

“Many committees are a nearly impossible task where, particularly in the endowment business, colleges, because rich graduates who've made big donations, Would love to sit on the board. They are treated with kid gloves because they're wonderfully good at making …”

Jeremy Grantham Mar 23, 2026 ▶ 56:42 Jeremy Grantham – Bubbles, Value Investing, and the Long Game at GMO (EP.493)

Prediction Not checkable as stated

Grantham: South Korea Will Cease Being a Viable State Within 50 Years

“That South Korea cannot be a viable political entity in as little as 4050 years. Cannot.”

Jeremy Grantham Mar 23, 2026 ▶ 1:10:04 Jeremy Grantham – Bubbles, Value Investing, and the Long Game at GMO (EP.493)

Grantham: Emerging market equities are at an unprecedented low relative valuation

More from Jeremy Grantham

Turn any episode into a week of clips.