📖Jeremy Grantham
Quality at a Fair Price
Seek quality businesses at fair prices.
The ideal investment is a high-quality business purchased at a fair price. Quality compounds wealth; fair prices protect capital.
🏠 Everyday Analogy
📖 Core Interpretation
Jeremy Grantham emphasizes durable business quality over short-term noise. A strong model, real competitive edge, and disciplined capital allocation matter more than quarterly excitement.
💎 Key Insight：Quality and fair price together create optimal investments.
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❓ Why It Matters
Without business-quality filters, investors drift toward stories rather than economics. Durable cash generation is what supports long-term valuation.
🎯 How to Practice
Use a checklist covering moat, management, unit economics, and capital allocation; track long-term cash generation instead of quarter-to-quarter noise.
⚠️ Common Pitfalls
Buying narratives instead of cash-generating economics
Overreacting to short-term operating noise
Ignoring management quality and capital allocation
📚 Case Studies
1
Dot-Com Bubble Mean Reversion (2000)
Grantham warned that tech stocks were absurdly overvalued versus historical norms and trimmed GMO’s exposure before the crash.
✨ Outcome：When the bubble burst, GMO portfolios fell less than the market and later redeployed into cheaper equities as valuations normalized.
2
U.S. Housing and Credit Bubble (2007)
Grantham highlighted extreme overvaluation in U.S. housing and risk assets, cutting exposure to equities and credit pre-crisis.
✨ Outcome：GMO avoided the worst of the 2008 collapse and then added risk as spreads and equity valuations reverted toward historical averages.
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