📖Jeremy Grantham
Behavioral Bias Awareness
Know your behavioral biases to avoid them.
Know the common behavioral biases that trap investors: anchoring, confirmation bias, loss aversion, and herding. Awareness is the first step to prevention.
🏠 Everyday Analogy
📖 Core Interpretation
Jeremy Grantham treats survival as the first objective. Limiting permanent capital loss, controlling leverage, and avoiding single-point failure are prerequisites for long-term compounding.
💎 Key Insight：Awareness of biases is the first defense against them.
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❓ Why It Matters
A single large drawdown can erase years of progress. Risk control is not timidity; it is the operating system that keeps compounding alive.
🎯 How to Practice
Define downside scenarios before entry, cap position size, avoid fragile leverage, and maintain liquidity so mistakes remain survivable.
⚠️ Common Pitfalls
Equating volatility with all forms of risk
Oversized positions without an exit plan
Using leverage to compensate for uncertainty
📚 Case Studies
1
Avoiding the Dot-Com Bubble (1999)
Grantham refused to chase tech and internet stocks despite underperforming peers during the late-1990s mania.
✨ Outcome：Clients owning quality, reasonably valued stocks avoided catastrophic losses when the bubble burst in 2000–2002.
2
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.
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