📖Jeremy Grantham
Value Discipline
Discipline in valuation determines investment success.
Never overpay for a security, no matter how exciting the story. The price you pay determines your return. Discipline in valuation is the foundation of investment success.
🏠 Everyday Analogy
📖 Core Interpretation
In Value Discipline, 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 price paid is the most important variable.
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❓ 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
Pre-Global Financial Crisis Caution (2007)
Grantham warned of a broad asset bubble, cutting exposure to risk assets and tilting toward quality stocks, cash, and selected safe bonds.
✨ Outcome：Portfolios following his asset allocation shift experienced materially lower losses during 2008–2009 and preserved capital for post-crisis rebalancing.
2
Pre‑Crisis Housing and Credit Bubble (2007)
Grantham highlighted extreme overvaluation in housing, credit, and equities, cutting risk assets and raising quality and cash.
✨ Outcome：The 2008–2009 crash validated his forecast; defensive positioning preserved capital and enabled cheaper re‑entry afterward.
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