Speaker

Jeremy Grantham

Jeremy Grantham

British-American investor, co-founder of Grantham, Mayo & Van Otterloo (GMO), and one of the most closely watched voices on both market bubbles and environmental resource limits. 83 [?] at the time of his September 2022 conversation with Tyler Cowen, he has spent recent years directing his own foundation’s capital into early-stage green venture investing while continuing to publish on what he calls the market’s ‘superbubble’.

Grantham grew up in the Yorkshire coal-mining town of Doncaster, raised by grandparents whose wartime, Quaker-influenced household ran on ‘waste not, want not’ — a frugality he says shaped a lifelong resource-scarcity instinct that is now, in his words, ‘in my cortex’. He studied at Sheffield (the only university that would take him) and arrived at Harvard Business School and then finance by what he describes as a series of lucky coincidences rather than ambition, entering the industry in 1968 because his friends already in it were having more fun than anyone else.

His two long-running specialisms sit side by side without fully merging: identifying rare, extreme market bubbles through historical pattern-matching, and directing the Grantham Foundation’s principal into early-stage green technology venture capital — around 45 investments made in two and a half years by the time of this conversation. He describes himself as far stronger at generating correct long-term ideas than at converting them into money, which is why he says he needed a partner from day one of his investing career.

Core positions

  • Mining cannot supply the green transition as currently configured. Known lithium reserves, fully mined, cover only about 5 per cent of what a single green transition requires; the fix is redesigning batteries around far more abundant potassium and sodium, not mining harder.
  • The present US market is a fourth superbubble. His method — an extended run of good years, peak profit margins, near-perfect conditions, and a slow build of euphoria ending in a fundamentals-free flashpoint — pattern-matches against very few historical cases (he names 1929 and 2000). He is explicit that a statistically rigorous call would need many more data points than he has, and bets on the pattern regardless.
  • No confidence that capitalism anticipates commons problems. On climate, soil erosion, and similar issues, he holds that markets ‘wait until you bang it on the nose’ rather than acting ahead of visible damage.
  • Mainstream economic estimates of climate damage are far too low. He rejects GDP-percentage estimates of climate cost (including Nobel laureate William Nordhaus’s work) as trivial next to the risk of a global society failing to remain stable at higher warming levels.
  • Underweighted slow-burn risks beyond climate: collapsing insect populations, vanishing Midwestern topsoil, and collapsing developed-world fertility rates, all under-researched because they resist easy proof and are hard to fund.
  • Sustained optimism about American venture capital, which he calls the country’s ‘last, best exceptionalism’, and cautious optimism about both nuclear fusion and geothermal energy reaching commercial viability.

In the wiki