Jeremy Grantham

Robert Jeremy Goltho Grantham (born 6 October 1938) is a British investor who co-founded GMO LLC, a Boston-based asset management firm. He started one of the world's first index funds in the early 1970s. Quotes Asset allocation is intellectually easy to get right because mean reversion is a reality, and new paradigms almost always an illusion. Asset class mispricing is sometimes so large it simply cannot be missed. (35 P/E in March 2000). Size of assets under management is the ultimate barrier to successful investing. As assets grow, you are forced either to pick increasing numbers of decreasingly good stocks or to buy larger, indigestible positions of your original holdings. The investment business is the perfect example of the Peter Principle: do well with $500 million, and they’ll give you $5 billion. managers are harder to pick than stocks. Getting the big picture right is everything. One or two good ideas a year are enough. Very hard work gets in the way of thinking. Everything I Know About the Market in 15 Minutes Value stocks have been bid up to a level where they may not even have an appropriate risk premium far less an excess return. For value investing has always had a hidden but serious risk: the sixty-year flood. The so-called price/book effect (and the small stock effect) sound like a free lunch, but in 1929–1933, 20 percent of all companies went bankrupt. They were not the large high-quality blue chips but small cheap stocks with low price/book ratios. To add insult to injury, the data indicates that the best growth managers add more to growth than the best value managers can add to value, probably because the fundamentals and the prices are more dynamic for growth stocks. Quoted in "Dean LeBaron’s Treasury of Investment Wisdom", Chapter 7, "Value Investing"