Jeremy Grantham Quotes
111 Jeremy Grantham Quotes
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[In October 2008 on what will be learnt from the GFC turmoil.] We will learn an enormous amount in a very short time, quite a bit in the medium term and absolutely nothing in the long term.
Jeremy Grantham
[In November 2008.] You don't get rewarded for taking risk; you get rewarded for buying cheap assets.
Jeremy Grantham
[In February 2012.] Watching neighbours get rich at the end of a bubble while you sit it out patiently is pure torture. The best way to resist is to do your own simple measurements of value…
Jeremy Grantham
[In July 2012.] Remember that history always repeats itself. Every great bubble in history has broken. There are no exceptions.
Jeremy Grantham
[In October 2008.] Great bubbles in history [have] always overcorrected.
Jeremy Grantham
[In October 2008.] I ask myself, ‘Why is it that several dozen people saw this crisis coming for years?’ I described it as being like watching a train wreck in very slow motion. It seemed so inevitable and so merciless, and yet the bosses of Merrill Lynch and Citi and even [U.S. Treasury Secretary] Hank Paulson and [Fed Chairman Ben] Bernanke - none of them seemed to see it coming.
Jeremy Grantham
[In October 2008.] Seeing these things requires more people with a historical perspective who are more thoughtful and more rightbrained - but we end up with an army of left-brained immediate doers.
Jeremy Grantham
[In October 2008.] I want to emphasize how little I understand all of the intricate workings of the global financial system. I hope that someone else gets it, because I don't. And I have no idea, really, how this will work out. I certainly wish it hadn't happened. It is just so intricate that all I can conclude, by instinct and by reading the history books, is that it will be longer, harder and more complicated than we expect.
Jeremy Grantham
[In November 2008.] If the assets you bought got pushed up in price simply because they were risky, then you are not going to be rewarded for taking a risk; you are going to be punished for it.
Jeremy Grantham
[In February 2012.] If the numbers tell you it’s a real outlier of a mispriced market, grit your teeth and go for it.
Jeremy Grantham
[In March 2013.] Economic theory doesn’t work with human beings. We’re far too messy.
Jeremy Grantham
[In March 2013.] You can make good money in the long-term in cheap stocks. What it’s about is value. If you have a market that becomes overpriced, you will make a return too little given the risk you take.
Jeremy Grantham
[In March 2013.] Being bullish sells. You will not easily hear honest advice when it is bearish.
Jeremy Grantham
[In February 2014.] Painful errors teach you more than success does.
Jeremy Grantham
[In March 2014.] Assets are overpriced generally. They will be cheap again.
Jeremy Grantham
[In May 1999 on the dotcom bubble with the S&P 500 earning average only being 2.9% a great deal less than one can earn on a Treasury bill.] The miracle is how loony it is and how few will say the emperor has no clothes.
Jeremy Grantham
[In May 1999.] We’re right, just early.
Jeremy Grantham
[In May 1999.] Indexing in the long run is sensible. In the short run it can be lethal, particularly now.
Jeremy Grantham
[In August 2001.] In March 2000, value had never been cheaper relative to growth. That was the all-time, world-record low-by a wide margin. The second-place candidate was the end of the Nifty Fifty period in December 1974.
Jeremy Grantham
[In August 2001.] We define a bubble as a 40-year event in which statistics went well beyond the norm…
Jeremy Grantham
[In August 2001.] When a cycle or bubble breaks it so crushes people's euphoria that they become absolutely prudent for the balance of their careers. I've been talking to older people who went through a wipeout and my best guess is about 95% of the people who have been through a bubble breaking never speculate in that asset class again.
Jeremy Grantham
[In August 2001.] I got wiped out personally in 1968, which was the last really crazy, silly stock market before the Internet era. I like to say I got wiped out before anyone else knew the bear market started. After 1968, I became a great reader of history books. I was shocked and horrified to discover that I had just learned a lesson that was freely available all the way back to the South Sea Bubble.
Jeremy Grantham
[In August 2001.] Timber is the only low-risk, high-return asset class in existence. People are not familiar with it. What they are not familiar with they avoid. But timber is the only commodity that has had a steadily rising price for 200 years, 100 years, 50 years, 10 years. And a unit of wood, just the price of a piece of wood-in real terms-beat the S&P over most of the 20th Century, from 1910 to 2000.
Jeremy Grantham
[In August 2001.] People ask what is going to happen next year, and I say I haven't the faintest idea. In general, the short term is unknowable and in an uncertain world, it should be unknowable.
Jeremy Grantham
[In August 2001.] Think of yourself standing on the corner of a high building in a hurricane with a bag of feathers. Throw the feathers in the air. You don't know much about those feathers. You don't know how high they will go. You don't know how far they will go. Above all, you don't know how long they will stay up. You know canaries in Jamaica end up in Maine once in a blue moon. They just get swept along for a week in a hurricane. Yet you know one thing with absolute certainty: Eventually on some unknown flight path, at an unknown time, at an unknown location, the feathers will hit the ground, absolutely, guaranteed. There are situations where you absolutely know the outcome of a long-term interval though you absolutely cannot know the short-term time periods in between. That is almost perfectly analogous to the stock market.
Jeremy Grantham
[In August 2001.] I am not a professional economist…
Jeremy Grantham
[In July 2002.] The faster it goes down, the shorter the bear market will be. The market can rally any time it likes.
Jeremy Grantham
[In July 2002.] When people get very discouraged, they really need a reason to be a hero and to step up and catch the falling knife. You need to know there is something in it for you. Why be brave? In 1974 Dick Mayo and I had a portfolio that was way, way under replacement cost. If something didn't yield 10%, we wouldn't put it in the portfolio.
Jeremy Grantham
[In July 2002.] In a world where almost all professional investors are depressed, you need something really pretty powerful to get you to put your cash reserves to work because it's your cash reserves that have been making you look like a hero, relatively, month after month. Somewhere. from inside you, you have got to drag out the courage to whip out your cash reserves and throw them into battle.
Jeremy Grantham
[In July 2002.] I can say with a clear conscience that I have never made a mistake in gold because I have never had an opinion on gold. I have completely and assiduously avoided it. I feel uncomfortable with gold. It has no yield.
Jeremy Grantham
[In July 2002.] I have been worried for two or three years that the savings rate is too low. The savings rate will go back up. It needs to go back up for a healthy economy in the long run. As it goes back up, it will be a drain on consumer spending.
Jeremy Grantham
[In December 2002.] I like to tell my story about the archangel Gabriel. The archangel comes down to a fund manager and says, `You've been a very good boy and I'm allowed to give you some really useful information - the probability distribution of the S&P 500 for the next 12 months. The probability distribution is 70% that cash will beat stocks and 30% that stocks will beat cash.' What does he do? I don't think there is anyone in our industry who doesn't know exactly what he does. He puts cash in his own account and leaves (the fund) 100% invested in equities because nobody in this business, or almost nobody, is willing to bet their career on a 30% chance of failure.
Jeremy Grantham
[In December 2002.] Five things I know about the market: One, the market is gloriously inefficient; two, the manifestations of the inefficiency are that they horribly emphasize comfort and discomfort; three, they extrapolate today's conditions forever so if inflation is low, they will assume that inflation will be low forever; four, the real world is mean reverting, so you have a huge creative tension between the behavioral-driven world and the real world, driven by mean reversion. The problem is, rule No. 5, we're all governed by career risk and business risk, which means that even though you know points 1 to 4, you don't know what the hell to do about it, and if you do anything about it, you're liable to pay a very high price. That's 98% of anything I know in five quick points.
Jeremy Grantham
[In December 2002.] I'll quit when it's not fun.
Jeremy Grantham
[In November 2003.] The simple story is the market is overpriced… Currently, the market is around 24 times trailing earnings, on a fairly generous earnings estimate. This is not just a bear market rally but the greatest sucker rally in history.
Jeremy Grantham
[In December 2004.] The nature of the great franchises is they are more durable than a couple of years of misfortune.
Jeremy Grantham
[In December 2004.] There is nothing in the world that is fairly priced.
Jeremy Grantham
[In December 2004.] We've learned the hard way that if you take too extreme a position, even though it will be the best in the long term, you won't have enough business left to celebrate the long term.
Jeremy Grantham
[In February 2006.] Based on our data, housing is a classic bubble.
Jeremy Grantham
[In March 2006.] As a value manager you live in dread of a paradigm shift - something changes and leaves you high and dry forever. And that's what we may be seeing in oil.
Jeremy Grantham
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