The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 18 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Grantham: The market bubble will likely break in weeks or months
“So I think this is an indicator, not a certainty, but a strong possibility that we are quite close to the bubble breaking in terms of psychology. Perhaps a matter of weeks or months, not years.”
Grantham: Every Two-Sigma Asset Bubble Historically Reverted to Pre-Bubble Trends
“In major countries, there was no exception to the principle that an overpriced market at two sigma, which is just a statistical measure. If you look at the price, you look at the breakout on the upside. If it's two sigma, there is no exception to the rule that…”
Salem: GMO's founding partners were famously not speaking to each other
“You look at GMO when I joined it, everything's firing on all cylinders. The returns are great. They're growing. The sun is shining. You get in there and after a week or two, you realize that founding partners don't even talk to each other.”
Grantham: Timing bubble peaks requires tracking speculative behavior, not valuation
“If you're trying to time the breaking of a bubble, the value is not that important. All of them are overpriced, and whether they're overpriced at 25 times earnings or 35 times earnings or in Japan at 65 times earnings, it's very difficult to work out in any so…”
Inker: Client banned GMO in 1999 for Grantham's 'persuasive' views
“In 1999, we were disinvited from speaking to their investment committee on the grounds that their committee chairman said that Jeremy Grantham was both dangerously persuasive and totally wrong.”
Inker: Historical crises dilute diversified equity portfolios by at most 5%
“Historically, apart from events of, frankly, revolution and regime change, we haven't seen profoundly dilutive events. We've seen things where you got diluted A few percent, maybe as much as five percent.”
Inker: Value historically beats market by 1% despite 3% earnings undergrowth
“Historically, they traded at a 25% discount, and they undergrew by three percent a year, and it turns out that a 25% discount and three percent a year undergrowth allows you to outperform by a point a year.”
Inker: Pre-2020 value investing drought mirrors the 1994-1999 era
“2000 to 2002 was a wonderful period for value. The similarity to the 1994 to 1999 period is this has been another dreadful period for value as a strategy. We see that kind of on a individual stock level. It's also been a lousy period for valuation driven inves…”
Inker: Allocators lack 1990s-level disgust for value investing
“We don't see that level of disgust with the idea of value today that we did back then.”
Grantham: GMO's AUM fell to $22B before surging to $165B post-crash
“We went from thirty two billion to 22. Then we exploded. In four years, we went from 22 to 165.”
Grantham: GMO beat the market for nine consecutive years by eight points annually
“We won the first nine years in a row. You can imagine starting a firm, that's a good time to do it. And we won by an average of eight points a year.”
Grantham: GMO made positive returns each year from 2000 to 2002
“We actually made nice money in 2000, nice money in 2001, and hung in by half a percent in 2002.”
Grantham: No fired clients returned to GMO after dot-com crash
“No one came back after firing us, even though we were right for the right reasons, and we made a ton of money.”
Grantham: GMO's Early Quant Model Matched Discretionary Picks and Performed Equally Well
“So we redefined the formula until slowly but surely over a few months, we got it to kick out a portfolio, which was 90% the same as ours. Interestingly, the 10% that was different did just as well as our 10%.”
Salem: Almost all major endowments initially invested in GMO via Cambridge Associates
“Almost all the major endowments had money with GMO because Hunter or Jim or others in the early cast at Cambridge had recommended, oh, this team at Boston really has it figured out.”
Grantham: GMO held Microsoft in value fund until exiting by June 2000
“Our claim to fame in our first quant funds is that we owned Microsoft in our value stream in the top decile of value from the day it appeared as a stock that met our size limit until late 99, when it finally got overpriced enough that it drifted into decile tw…”