#1
Management Evaluation
"Evaluate management by their actions, not their words. Look for a track record of capital allocation, shareholder communication, and aligned incentives."
Judge management by actions, not words.
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Jeremy Grantham📌 Business Judgment
Jeremy Grantham's Business Judgment Rules
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...
3 principles·Business Judgment
3 Key Business Judgment Principles
#2
Industry Structure Analysis
"Understand the industry structure before evaluating any company. Industry economics often matter more than company-specific factors in determining returns."
Industry structure shapes investment outcomes.
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Capital Allocation Assessment
"The most important skill for a CEO is capital allocation. Evaluate how management deploys capital — do they create or destroy value with their decisions?"
Evaluate management's capital allocation skills.
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What are Jeremy Grantham's key business judgment principles?
Jeremy Grantham has 3 key principles on business judgment. The most important one is "Management Evaluation" — Evaluate management by their actions, not their words.
How does Jeremy Grantham apply business judgment in practice?
Jeremy Grantham applies business judgment through several key principles including "Management Evaluation" and "Industry Structure Analysis". These principles guide practical investment decisions and have been tested across decades of market cycles.
What makes Jeremy Grantham's approach to business judgment unique?
Jeremy Grantham's approach to business judgment is distinguished by a focus on long-term thinking and fundamental analysis. With 3 specific principles in this area, Jeremy Grantham provides a comprehensive framework that investors at any level can study and apply to improve their decision-making.
