Jeremy Grantham
Encyclopedia
Jeremy Grantham is a British investor and Co-founder and Chief Investment Strategist of Grantham Mayo Van Otterloo (GMO), a Boston-based asset management firm. GMO is one of the largest managers of such funds in the world, having more than US $107 billion in assets under management
as of December 2010. Grantham is regarded as a highly knowledgeable investor in various stock, bond, and commodity markets, and is particularly noted for his prediction of various bubbles.
He has been a vocal critic of various governmental responses to the Global Financial Crisis. Grantham started one of the world's first index funds in the early 1970s.
and studied Economics at the University of Sheffield
. In 1966 he completed an MBA at Harvard University
.
based on internal predictions of market direction.
In GMO's April 2010 Quarterly Letter Grantham spoke to the tendency for all bubbles to revert to the mean saying:
In his Fall 2008 GMO letter, Grantham commented on the underlying causes of the world credit crisis:
Grantham focused on the issue of personal traits and leadership in trying to explain how we reached the current economic crisis.
, to establish the Grantham Institutes for Climate Change and the Grantham Research Institute on Climate Change and the Environment
, which will enable both institutions to build on their extensive expertise in climate change research.
Assets under management
Assets under management is a financial term used denote the market value of funds being managed by a financial instutition on behalf of its clients, investors, depositors, etc. This metric is a sign of size and success against competition...
as of December 2010. Grantham is regarded as a highly knowledgeable investor in various stock, bond, and commodity markets, and is particularly noted for his prediction of various bubbles.
He has been a vocal critic of various governmental responses to the Global Financial Crisis. Grantham started one of the world's first index funds in the early 1970s.
Early Life
Grantham was born in DoncasterDoncaster
Doncaster is a town in South Yorkshire, England, and the principal settlement of the Metropolitan Borough of Doncaster. The town is about from Sheffield and is popularly referred to as "Donny"...
and studied Economics at the University of Sheffield
University of Sheffield
The University of Sheffield is a research university based in the city of Sheffield in South Yorkshire, England. It is one of the original 'red brick' universities and is a member of the Russell Group of leading research intensive universities...
. In 1966 he completed an MBA at Harvard University
Harvard University
Harvard University is a private Ivy League university located in Cambridge, Massachusetts, United States, established in 1636 by the Massachusetts legislature. Harvard is the oldest institution of higher learning in the United States and the first corporation chartered in the country...
.
Investment philosophy
Grantham's investment philosophy can be summarized 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 a return to the mean. The firm allocates assetsAsset allocation
Asset allocation is an investment strategy that attempts to balance risk versus reward by adjusting the percentage of each asset in an investment portfolio according to the investors risk tolerance, goals and investment time frame.-Description:...
based on internal predictions of market direction.
Views on Market Bubbles and the 2007-2008 Credit Crisis
Grantham has built much of his investing reputation over his long career by correctly identifying speculative market "bubbles" as they were happening and steering clients' assets clear of impending crashes. Grantham avoided investing in Japanese equities and real estate in the late eighties, as well as technology stocks during the Internet bubble in the late nineties.In GMO's April 2010 Quarterly Letter Grantham spoke to the tendency for all bubbles to revert to the mean saying:
In his Fall 2008 GMO letter, Grantham commented on the underlying causes of the world credit crisis:
Grantham focused on the issue of personal traits and leadership in trying to explain how we reached the current economic crisis.
Philanthropy
Jeremy, together with Hannelore Grantham established the Grantham Foundation for the protection of the environment in 1997. Substantial commitments have been made to both Imperial College and London School of EconomicsLondon School of Economics
The London School of Economics and Political Science is a public research university specialised in the social sciences located in London, United Kingdom, and a constituent college of the federal University of London...
, to establish the Grantham Institutes for Climate Change and the Grantham Research Institute on Climate Change and the Environment
Grantham Research Institute on Climate Change and the Environment
The Grantham Research Institute on Climate Change and the Environment is a research centre at the London School of Economics and Political Science founded in May 2008...
, which will enable both institutions to build on their extensive expertise in climate change research.
External links
- GMO Website
- Where This Bear Is Putting His Honey Bloomberg Businessweek March 18 2002, Lewis Braham. Retrieved July 26 2011.
- The Grantham Prize
- The Grantham Foundation
- Time to Wake Up: Days of Abundant Resources and Falling Prices Are Over Forever