Jeremy Grantham
Co-founder of GMO, famous for identifying and calling market bubbles
"The market can stay irrational longer than the client can stay patient."
About Jeremy Grantham
Jeremy Grantham (born October 6, 1938) is a British investor and co-founder of GMO (Grantham, Mayo, & van Otterloo), a Boston-based asset management firm managing over $60 billion in assets. He is renowned for his expertise in identifying and predicting market bubbles. Grantham successfully predicted the Japanese asset bubble in the late 1980s, the dot-com bubble in 2000, and the 2008 financial crisis. His willingness to make bold, contrarian calls has earned him a reputation as one of the most prescient investors in identifying market excesses. His investment philosophy centers on mean reversion – the belief that asset prices eventually return to their long-term averages. Grantham uses historical valuation metrics and fundamental analysis to identify when markets are overvalued or undervalued. Beyond investing, Grantham is a passionate advocate for environmental sustainability and has committed most of his wealth to fighting climate change through the Grantham Foundation. He views climate change as both a moral imperative and an investment opportunity.
Core Investment Principles
Mean Reversion
Asset class returns revert to the mean. High valuations predict low future returns; low valuations predict high returns.
→Identify Bubbles
Bubbles are identifiable before they burst. Watch for valuations 2+ standard deviations above historical norms.
→Patient Contrarianism
Being early is the same as being wrong. But in the long run, fundamentals always win.
→Asset Allocation Focus
Most returns come from asset allocation, not security selection. Get the big picture right first.
→Long-Term Forecasting
Seven-year forecasts based on valuations are remarkably accurate. Short-term is noise.
→Browse Jeremy Grantham's Principles by Topic
Famous Quotes
"Every great bubble in history has broken. There are no exceptions."
"Profit margins are the most mean-reverting series in finance."
"You don't get rewarded for taking risk; you get rewarded for buying cheap assets."
"I believe the only things that really matter in investing are the bubbles and the busts."
"The higher they go"
