Jeremy Grantham Quotations

We used to live in a world where the price of resources came down steadily, and now the world has changed. You have a great mismatch between finite resources and exponential population growth.

The only investable idea I have real confidence in is farming and forestry. My family owns some forest, and now we're closing on a farm. Make the farming more sustainable and the forestry more sustainable, and everyone benefits.

Libertarians believe that any government interference is bad. Anyone with a brain knows that climate change needs governmental leadership, and they can smell this is bad news for their philosophy. Their ideology is so strongly held that, remarkably, it's overcoming the facts.

Low-cost, high-grade coal, oil and natural gas - the backbone of the Industrial Revolution - will be a distant memory by 2050. Much higher-cost remnants will still be available, but they will not be able to drive our growth, our population and, most critically, our food supply as before.

Bubbles have quite a few things in common, but housing bubbles have a spectacular thing in common, and that is every one of them is considered unique and different.

I have an eccentric view on commodities not necessarily shared by my colleagues - or by almost anybody. And that is, we're running out of everything.

History speaks pretty clearly that the markets do better with Democrats. Republicans' ideas of what constitutes fiscal responsibility simply are not good for the stock market. Democrats have many tendencies, but one of them is to look after the workers, and actually that tends to be good for demand and good for markets.

I think the Fed is not designed to have effective tools to deal with the economy. It should settle for just controlling the money supply. And - if it insists, it can worry about inflation.

When it comes to portfolios, my personal advice is for anyone who can, put money into forestry or farmland. Long term, you would probably never come near their returns in the stock market. In the world that I see, land is golden.

We could solve all our problems if only we were the efficient, rational human beings of standard economic theory and had politicians willing to think in the long-term interest of their people rather than their own.

One day we will have more inflation, and our bonds will bleed like a pig. The only reason for buying long bonds is short-term or as a desperate haven for terrorized investors. But the potential to make longer-term real money is naught.

As a professional, you can afford to pick some stocks and be wrong about a few of them. To keep your job, you cannot take the risk of being seen to be wrong about the 'big picture' for very long.

If there's unemployment, having the government help reduce that unemployment, increase employment directly is a pretty good idea. It's not driving out competition; it's not crowding out.

If you're afraid of inflation, I think - and if you can bring yourself to have a long horizon - and when I say long, I mean ten to 20 years, not the usual ten to 20 weeks - that locking up resources in the ground is a terrific idea.

If you're saying something that people don't want to hear or accept, a significant proportion of them will reply with hostility. Not because they know the facts, or because they have researched it themselves, but because they're so psychologically involved in believing good news that they will oppose it with a reflex.

Capitalism does millions of things better than the alternatives. It balances supply and demand in an elegant way that central planning has never come close to.

The potential for alternative energy sources, mainly solar and wind power, to completely replace coal and gas for utility generation globally is, I think, certain. The question is only whether it takes 30 years or 70 years.

There is a lot of pain still to be had in the equity markets, particularly aimed at the risky end of the spectrum. We think the fair value on the market is about a third lower in the U.S. . .

If stocks are attractive and you don't buy, you don't just look like an idiot, you are an idiot.

Some societies are also more optimistic than others: the U.S. and Australia are my two picks Tell a European you think there’s a housing bubble and you’ll have a reasonable discussion. Tell an Australian and you’ll have World War III. Been there, done that!

Volatility is a symptom that people have no idea of the underlying value

Profit margins are probably the most mean-reverting series in finance, and if profit margins do not mean-revert, then something has gone badly wrong with capitalism. If high profits do not attract competition, there is something wrong with the system and it is not functioning properly.

There is no single theory that is used in economics that considers the finite nature of resources. Its shocking.

You don't get rewarded for taking risk; you get rewarded for buying cheap assets. And 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.

...how little our side of the industry did to move its business to the more ethical firms and to make a fuss about conflicted or unethical behavior. Had a number of us moved our business, we might have slowed or even stopped the 30-year slide in conflicted, unethical behavior that we have experienced. I, for one, regret the modest nature of our moves. We all could have done more. We have tolerated a pretty nasty decline in standards. Shame on us.

You don't actually find a strong correlation between- top-line GDP growth and making money in the market. It- it seems like you should. The fastest-growing countries should give you the highest return. They simply don't. But, there's only four of us- that- that believe that story. Everyone else in the world believes that if you grow fast like China, you'll outperform in the stock market.

I hate gold. It does not pay a dividend, it has no value, and you can't work out what it should or shouldn't be worth," he said. "It is the last refuge of the desperate.

The pure administration of Graham-and-Doddery really needs a long-term lock-up like Warren Buffett has, or it will have occasional quite dreadful client problems.

Remember that history always repeats itself. Every great bubble in history has broken. There are no exceptions.

At least us old men remember what a real bear market is like, and the young men haven't got a clue.

I like to be right. I try not to miss the big ideas, forget the little ones, and try to get them right. End of job description.

The stock market is overpriced. Everything is overpriced. Junk is king.

I would say that financial markets are very inefficient, and capable of extremes of being completely dysfunctional.

I think I'm right-brained, incapable of managing my way out of a brown paper bag.

I find the parallels between how some investors refuse to recognise the trends and our reaction to some of our environmental challenges very powerful. There is an unwillingness to process unpleasant data.

It is better to be lucky than good, but of course appropriate to aspire to both.

Americans are just about the worst at dealing with long-term problems, down there with Uzbekistan, but they respond to a market signal better than almost anyone. They roll the dice bigger and quicker than most.

The world is using up its natural resources at an alarming rate, and this has caused a permanent shift in their value. We all need to adjust our behavior to this new environment. It would help if we did it quickly.

You can't run the economy on BMWs alone. If the average person is in a pickle, how do you have a healthy economy?

Think how weird profit margins are: We've got high unemployment and financial crises - and world record profit margins. People think the American market is very cheap. We don't. The market quite incorrectly gives full credit to today's earnings.

We live on a finite planet. We have finite resources, and we're running out of good, arable land.

The language 'It's too late' is very unsuitable for most environmental issues. It's too late for the dodo and for people who've starved to death already, but it's not too late to prevent an even bigger crisis. The sooner we act on the environment, the better.

Volatility is a symptom that people have no idea of the underlying value-that they have stopped playing the asset game. They're not buying because it's a company with certain attributes. They're buying because the price is rising. People are playing games not related to any concept at all of what the long-term value of the enterprise is. And they know it.

Equities are boring; bonds are disgusting.

Modern agriculture has been accurately described as a way of turning oil into food. As the price of oil continues to rise, so will the price of food.

Capitalism believes that its remit is exclusively to make maximum short-term profits.

Ridiculous as our market volatility might seem to an intelligent Martian, it is our reality and everyone loves to trot out the 'quote' attributed to Keynes (but never documented): 'The market can stay irrational longer than the investor can stay solvent.' For us agents, he might better have said 'The market can stay irrational longer than the client can stay patient.'

By background I'm both a Quaker and a Yorkshireman, which I like to call double jeopardy.

Everyone asks about gold. This is the irony: just as Jim Grant tells us (correctly) that we all have faith-based paper currencies backed by nothing, it is equally fair to say that gold is a faith-based metal. It pays no dividend, cannot be eaten, and is mostly used for nothing more useful than jewelry. I would say that anything of which 75% sits idly and expensively in bank vaults is, as a measure of value, only one step up from the Polynesian islands that attached value to certain well-known large rocks that were traded.

Battering down solar cells on the roofs of Wal-Marts in California. I think that will be some of the highest-return investments that anyone ever makes.

I believe the only things that really matter in investing are the bubbles and the busts

The investment business has taught me – increasingly as the years have passed – that people, especially investors (and, I believe, Americans), prefer good news and wishful thinking to bad news; and that there are always vested interests to offer facile, optimistic alternatives to the bad news.

The individual is far better-positioned to wait patiently for the right pitch while paying no regard to what others are doing, which is almost impossible for professionals.

Market timing, by the way, is a tag some buy-and-hold investors use to put down anything that involves using your brain. These are the same people who like to watch the locomotive coming and get run down in the name of discipline.

Investment bubbles and high animal spirits do not materialize out of thin air. They need extremely favorable economic fundamentals together with free and easy, cheap credit, and they need it for at least two or three years. Importantly, they also need serial pleasant surprises in such critical variables as global GNP growth.

Although value is a weak force in any single year, it becomes a monster over several years. Like gravity, it slowly wears down the opposition.

I consider most of the talent in the financial world to be suboptimal. It could be better placed earning its living in the real world.

I don't mind the government accruing debts as long as every dollar is spent effectively with a high return. That works out fine. If you accumulate debts and waste your money, that's, of course, a disaster.

The market is incredibly inefficient and capable on rare occasions of being utterly dysfunctional. And people have a really hard time getting their brain around that fact. They want to believe that it's approximately efficient almost all the time, and it simply isn't true.