Jeremy Grantham – Bubbles, Value Investing, and the Long Game at GMO

**Jeremy Grantham** (0:00)
The great bubbles are associated with great investment ideas that get overdone. It has to be serious, and ideally, it has to be obviously serious. Railroads are the best example, followed by the Internet. If you see that railroads are going to change the world, then of course you want to invest. It was precisely their obviousness and their importance. Internet, most people could see that it was pretty serious, that it would eventually change the world. Amazon went up six times, something like that, in 2000 Even though it was a successful idea, it went down 92%. Check it. It went down 92% in the bust, and then it arose again to inherit the earth. That isn't in a way exceptional. That's what you should expect. So here we are with NVIDIA looking like Amazon Squared, the money dwarfing any CapEx program in history, everyone being clear in their mind that this is the biggest thing they've ever had in their lives, and they're right. It is. That's why the investment program is almost certain to be overdue.

**Ted Seides** (1:11)
I'm Ted Seides, and this is Capital Allocators.
My guest on today's show is Jeremy Grantham, the co-founder of GMO, a $100 billion Boston-based asset management firm he co-founded in 1977 Over six decades in markets, Jeremy has been one of the most respected and outspoken voices on value, market bubbles, and long-term investing. He recently published The Making of a Permabear with Edward Chancellor, an account of his career and investment lessons learned along the way. Our conversation begins with Jeremy's early lessons in frugality growing up in wartime Yorkshire, and his interest in numbers and investing. We trace his career through the founding of Batterymarch and GMO, the golden period of value, the painful lessons of the dot-com bubble, and the challenges since. We cover Jeremy's framework for identifying and navigating market bubbles, career risk, and the current AI investment boom, and close with his essential philanthropic work to change the trajectory of the environment alongside the investment strategy he deploys in his foundation. Before we get going, after a long winter, we're starting to see green shoots in the changing of the season. Spring training for baseball, March madness for basketball, and the sunshine double in tennis all remind us that hope springs eternal. But these days, it's harder to be optimistic about another list of challenges. Private market liquidity, peace around the world, and keeping up with my son Eric in creating witty spread the word clips. I can't figure out what will happen in private credit, how the private equity bottleneck will ease, what benchmark should replace the S&P 500, or why so many people have reached out commenting on Eric's lack of interest in the show. But I do know that the answers await from our incredible guests, and you should encourage all your colleagues to listen in and find out that truth. Thanks so much for spreading the word. Capital Allocators is brought to you by AlphaSense. Expert calls have always been one of the most powerful ways to build conviction. But today, investors are asked to cover more companies and move faster with leaner teams. With AlphaSense's AI-led expert calls, their Tegas call service team sources experts based on your research criteria and lets the AI interviewer get to work. Then they take it one step further. Your call transcripts flow natively into your AlphaSense experience and become searchable and comparable, so your primary insights plug directly into your earnings, diligence and pitchbook workflows with no tool switching. AI for coverage and efficiency, humans for complexity and conviction. Sounds like just the right mix to create a scalable institutional edge without growing headcount. For hedge funds, this means validating thesis assumptions before earnings across dozens of experts instead of a handful. For private equity, it means faster pre-IOI scans and deeper commercial diligence. And for asset managers, it means pulling real operators' perspectives straight into models without disconnected tools or manual handoffs. All of this lives inside the AlphaSense platform, turning raw conversations into comparable, auditable insight. The first to see wins, the rest follow. Learn more at alphasense.com/capital.
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**Jeremy Grantham** (5:27)
It's a pleasure.