The Making of a Permabear

From the legendary investor famous for his market innovations and predictions comes a brilliant insider account that is as much the tale of a storied career as it is a vivid, propulsive history of the last sixty years of the stock market itself Raised in a Yorkshire coal-mining town, Jeremy Grantham once won seven games of Monopoly in a single evening—he figured out the most efficient properties on the board and went all in. So begins the story of one of the world’s greatest investors and of an iconoclastic career launched into the stratosphere by a few simple ideas: buy cheap, watch for bubbles, and stick to your guns when you know you’re right. Deep curiosity about the history of the market and investors‘ fundamental behavior keeps Grantham one step ahead. He creates one of the first index funds in the 1970s, pioneers quantitative funds in the 1980s, and his firm becomes the world’s biggest investor in emerging markets. He earns a reputation for loudly and accurately predicting bubbles but also learns by painful experience why so few others will: “It is terrible business to blow the whistle on a major bull market.” Grantham’s firm skyrockets from $250 million to a peak of $155 billion in assets under management. But as his wealth grows, so do his fears about the deficiencies of capitalism and the unfolding environmental crisis. He decides—at the top of his game—to donate 95% of his wealth to address the threat of climate change. With wit that’s as cutting against himself as his critics, Grantham reveals how hunting for bargains requires understanding the deep inefficiencies of the market and the human foibles that drive it. As he demonstrates again and again—to stay the course when the market is wrong, you need to be willing to endure furious clients and a lot of money lost in the meantime. “The best ideas eventually come out on top;” Grantham says, “but sadly there‘s no guarantee you won‘t go out of business waiting.” That you might lose your job for being right is at the root of the short-termism that dominates so much of the investing landscape, and such thinking has had disastrous results in a world facing existential long-term problems. Ultimately, Grantham offers a deeply human, often heretical, and quietly profound lens on investing today.