📖Jeremy Grantham
Price vs Value Disconnect
Prices diverge from value short-term but converge long-term.
In the short run, the market is a voting machine; in the long run, it's a weighing machine. Prices can diverge wildly from value, but eventually converge.
🏠 Everyday Analogy
📖 Core Interpretation
In Price vs Value Disconnect, Jeremy Grantham focuses on the gap between price and value. Returns come from paying less than what a business is worth, not from guessing short-term market moves.
💎 Key Insight：The voting-to-weighing machine transition is inevitable.
AI Deep Analysis
Get personalized insights and practical guidance through AI conversation
❓ Why It Matters
Ignoring valuation turns even good companies into poor investments. Overpaying compresses future returns and leaves little margin when assumptions are wrong.
🎯 How to Practice
Estimate intrinsic value with conservative assumptions, set clear buy ranges, and act only when price offers a meaningful discount with acceptable downside.
⚠️ Common Pitfalls
Confusing a low price with true cheapness
Using one metric without business context
Overly optimistic assumptions that erase margin of safety
📚 Case Studies
1
High-Quality Stocks in the GFC (2008)
During the Global Financial Crisis, Grantham emphasized financially strong, high-quality companies over leveraged or speculative names.
✨ Outcome：Quality stocks fell less than the market and rebounded faster, preserving capital and compounding strongly in the recovery.
2
Asian Financial Crisis Aftermath (1998)
Grantham applied a value lens to battered Asian and other emerging markets following the 1997–98 crisis, arguing currencies and equities were deeply undervalued versus fundamentals.
✨ Outcome：Positions were volatile short term but generated strong multi‑year returns as economies stabilized and valuations normalized.
See how masters handle real scenarios?
30 real investment dilemmas answered by legendary investors
Explore Scenarios →