Jeremy Grantham: ‘Almost Everything Looks More Attractive Than the US Equity Market’

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**SPEAKER_2** (0:27)
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**Amy Arnott** (0:33)
Hi and welcome to The Long View. I'm Amy Arnott, Portfolio Strategist with Morningstar. Today on the podcast, we're delighted to welcome back Jeremy Grantham to discuss his book, The Making of a Permabear, The Perils of Long-Term Investing in a Short-Term World, which he co-authored with Edward Chancellor. Jeremy is the long-term investment strategist at his namesake firm, Grantham, Mayo, Van Otterloo & Company, or GMO, which he co-founded in 1977
He serves on GMO's Asset Allocation Committee and Board of Directors. Prior to GMO, Jeremy was co-founder of Batterymarch Financial Management, and before that was an economist at Royal Dutch Shell. He earned his undergraduate degree from the University of Sheffield and his MBA from Harvard University.
Jeremy is a member of the Academy of Arts and Sciences, holds a CBE from the UK, and is a recipient of the Carnegie Medal of Philanthropy. In 1997, he and his family started the Grantham Foundation for the Protection of the Environment, which supports research and action to address climate change. Jeremy, welcome back to The Long View.

**Jeremy Grantham** (1:51)
Nice to be here.

**Amy Arnott** (1:52)
Thank you so much for joining us today.
The book, The Making of a Permabear, notes that you've always had bad writer's block and struggled with school essays and quarterly shareholder letters. And I'm wondering what your writing process looked like for this book and whether it was any easier.

**Jeremy Grantham** (2:14)
Well, Edward Chancellor is a professional writer, he's written a couple of really good best-selling financial books, and he's a buddy, and he worked with me at GMO for six or seven years. And one of our board members got the bright idea that they should have a book about me. And I knew from my history of laziness or writer's block, depending on how polite you want to be, that it would not get done.
And so I went along happily. And the day he accepted the project, the day after, he received something like 1200 pages of 20 years of quarterly letters.
And to say that I and eight other people had not labored hard, would be completely wrong. We struggled mightily and rewrote it and rewrote it. And then went after the punctuation and the phrasing. And it was a major effort to make it fairly high quality. So he started with 1200 pages of probably much more polished than a typical book. And full of graphs and so on. And also containing every bright idea about finance I ever had, I think. And then he did 25 hours of interviews with me, quite a few of them in the flesh and the rest on Zoom. Then he read everything that had been written about me or by me, which was the by me was quite short, but a few. And then he had to put it all together.
And he decided what the general thread would be and what would go in. And I got to decide what would go out from that. So I had kind of veto rights. But I didn't have veto rights to get it in. I just had veto rights to take it out. So that was the format. And it ended up being a lot more work than he'd thought. It was the first time he'd done a joint enterprise like that.
And he pushed me on occasions gently towards the fixed income end, which I have mostly stayed away from. And so I pushed back to try and keep it to a minimum. And he tended to push me away from the non strictly financial stuff. So my quarterly letters had made really quite a big thing. I was happy to point out what I saw as the deficiencies in capitalism, and in the financial model, and in the economist, particularly financially oriented economist, and inequality and things like this. And just the kind of blind ignorance of capitalism and the economics industry towards things that mattered to me, running out of resources, climate change, and toxicity. And he tried to keep, I spent the last 15 years, by the way, mainly on that topic, long term threats to society and hence to the economy. And the only financial thing I kept in this 15 years was the rising and falling of the great bubbles, because that had always been a hobby slash specialty of mine going back 40 years. And a specialty of Edward's too.