Robert Jeremy Goltho Grantham (born 6 October 1938) is a British investor and co-founder and chief investment strategist of GMO LLC, a Boston-based asset management firm. GMO had more than US$118 billion in assets under management as of March 2015.GMO LLC. official site . Retrieved 20 February 2014 This number dropped to $65 billion as of December 2020. Grantham has been a vocal critic of various governmental responses to the 2008 financial crisis. He started one of the world's first index funds in the early 1970s.
In 2011, he was included in the 50 Most Influential ranking of Bloomberg Markets magazine.
Early life Grantham was born on 6 October 1938 in Ware, Hertfordshire,'Derde beurscrash komt eraan en wordt een ongekend bloedbad' | Het Financieele Dagblad. Retrieved 30 October 2016. and grew up in Doncaster. He studied economics at the University of Sheffield. In 1966, he completed an MBA at Harvard Business School."Jeremy Grantham on the battle to save society from climate change: 'we're not winning, Harvard Business School Alumni Bulletin, 15 May 2019
Investment philosophy Grantham's investment philosophy can be summarised by his commonly used phrase "reversion to the mean". Essentially, he believes that all asset classes and markets will revert to mean historical levels from highs and lows. His firm seeks to understand historical changes in markets and predict results for seven years into the future. When there is deviation from historical means (averages), the firm may take an investment position based on anticipated return to the mean. The firm allocates assets based on internal predictions of market direction.
Grantham has been described as a contrarian investor and permabear. He named his 2026 book about booms and busts of the past half century The Making of a Permabear: The Perils of Long-term Investing in a Short-term World. It was co-written with Edward Chancellor.
In 1971, Grantham helped established one of the earliest index funds at Batterymarch Financial Management.Justin Fox (2009) The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street. HarperCollins The idea was unusual at the time and the fund was not a success.
Opinions and perspectives Views on market bubbles and the 2007–2008 credit crisis Grantham built much of his investing reputation over the course of his career by identifying speculative asset bubbles as they were unfolding. He avoided investing in Japanese equities and real estate in the late 1980s during the peak of the Japanese asset price bubble,"As the bubble grew, GMO systematically reduced exposure to Japan. By late 1988, GMO owned no Japanese stocks in what Jeremy Grantham characterized a 'bet-the-firm' position." David F. Swensen and Charles D. Ellis. Pioneering Portfolio Management, An Unconventional Approach to Institutional Investment. The Free Press, and avoided technology stocks during the Internet bubble of the 1990s. A decade later, he limited his exposure to the housing bubble. In 2010, Elizabeth Leary wrote in Kiplinger that analysis of his past newsletters confirms many of Grantham's predictions. In a 2021 interview, Grantham distinguished between identifying overpriced asset bubbles (which he believes is not particularly difficult) and predicting when such bubbles will collapse (which he admits is impossible, saying only that asset bubbles end at some point). Grantham also acknowledged that his strategy can underperform market averages for years, testing his clients' patience, but said his strategy has always paid off long-term by avoiding overvalued assets.
In GMO's April 2010 Quarterly Letter, Grantham spoke to the tendency of all bubbles to revert to the mean:
In his Fall 2008 GMO Letter, Grantham commented on his evaluation of the underlying causes of the then-ongoing world credit crisis:
Grantham focused on personal traits and leadership in trying to explain how we reached the economic crisis.
Fossil fuels and the Keystone pipeline Grantham has repeatedly said that the rising cost of energy—the most fundamental commodity—between 2002 and 2008 falsely inflated economic growth and GDP figures worldwide and that we have been in a "carbon bubble" for approximately the last 250 years, during which energy was very cheap. He believes this bubble is coming to an end. He has stated his opposition to the Keystone Pipeline on the basis of the environmental consequences its construction will bring to Alberta and the planet due to the contribution that burning the extracted oil would make to climate change.Charlie Rose Show Interview with Jeremy Grantham . Retrieved 11 May 2013
Timber investment Grantham is a strong advocate for investments in the timber industry, which also relies on trees for biomass/biofuel (woodchips). The potential conflict of interest with Grantham's philanthropic engagement for the "beyond coal" campaign of the Sierra Club is criticized in Jeff Gibbs's documentary Planet of the Humans.
Resource limitations In his April 2011 Quarterly Letter, Grantham reminded investors to be aware of impending resource limitations, arguing that they should start "to recognize that we now live in a different, more constrained, world in which prices of raw materials will rise and shortages will be common": in essence, "the days of abundant resources and falling prices are over forever".Grantham, J., Time to Wake Up: Days of Abundant Resources and Falling Prices Are Over Forever, GMO Quarterly Letter, April 2011, archived on 14 July 2011, accessed on 6 March 2026
Philanthropy Grantham and his wife, Hannelore, established the Grantham Foundation For the Protection of the Environment in 1997. Substantial commitments have been made to Imperial College London, the London School of Economics, and the University of Sheffield to establish the Grantham Institute – Climate Change and Environment, the Grantham Research Institute on Climate Change and the Environment, and the Grantham Centre for Sustainable Futures, respectively, which will enable the institutions to build on their extensive expertise in climate change research. The Grantham Foundation for the Protection of the Environment's 2011 tax filing shows the Foundation donated $1 million to both the Sierra Club and to The Nature Conservancy and $2 million to the Environmental Defense Fund that year. The Foundation has also supported Greenpeace, the World Wide Fund for Nature, Rare, and the Smithsonian. From 2006 to 2012, The Grantham Foundation for Protection of the Environment funded a $75,000 prize for environmental journalism. It was administered by the University of Rhode Island's Metcalf Institute for Marine & Environmental Reporting.
In August 2019, Grantham dedicated 98% (approximately $1 billion) of his personal wealth to fight climate change. He believes that green technologies are profitable investments in the long run, claiming that decarbonizing the economy will be an investing bonanza for those who know it's coming.
Awards and honours
Grantham was elected a member of the American Academy of Arts and Sciences. With his wife, Hannelore, he received the Carnegie Medal for Philanthropy.
He was appointed Commander of the Order of the British Empire (CBE) in the 2016 Birthday Honours for philanthropic service to climate change research. 2009 Honorary degree, Imperial College London. 2010 Honorary degree, The New School, New York. 2012 Honorary degree, University of Sheffield.
See also Edward Chancellor, worked with Grantham at GMO Everything bubble
References
External links
"Jeremy Grantham on population growth, China and climate sceptics" by Leo Hickman, The Guardian, 15 April 2013 , CNBC Television, 7 March 2019 "Jeremy Grantham's 'Race of Our Lives' speech", presented in Chicago at the 2018 Morningstar Investment Conference (video and text)