Veteran investor Jeremy Grantham received a torrent of online abuse recently after dismissing the investment appeal of bitcoin. That abuse, says Grantham, suggests the equity bull market (in his eyes, a bubble) may burst within months.
Grantham has argued in the past that rapidly rising hostility to market bears is a very good indicator of a late-stage market bubble.
He returned to that theme last week, noting he had recently given his “fairly bland” opinion about bitcoin, namely that it was faith-based.
This commonplace observation was greeted by “armies of individual fanatics”, says Grantham. “There was no insult that was not good enough for me, not just senility and old age and complete ignorance about bitcoin. I got three insults back about my big ears, which I hadn’t had since I was seven years old.”
This is just one of many potentially worrisome signs cited by Grantham, who also refers to valuations and "crazy behaviour" in stocks like GameStop and Tesla.
He may be right when he says rising hostility to bears is a late-stage indicator, but there are two problems with this argument. Firstly, bitcoin enthusiasts have always tended to be fanatical.
Secondly, personalised online abuse is now commonplace. Yes, sceptics like Grantham get pilloried in certain quarters, but so do commentators who have the temerity to suggest stocks may not be in a bubble.
Today’s polarised online world isn’t just characterised by rising hostility to bears; it’s characterised by rising hostility to anyone who doesn’t share their opinion.