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Profit margins are probably the most mean-reverting series in finance, and if profit margins do not mean-revert, then something has gone badly wrong with capitalism. If high profits do not attract competition, there is something wrong with the system and it is not functioning properly.

Jeremy Grantham

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Jeremy Grantham
Age: 86
Born: 1938
Born: October 6
Investor
Manager
Herts
Robert Jeremy Goltho Grantham
Probably
Finance
High
Badly
Gone
Properly
Reverting
Wrong
Profit
Revert
Mean
Capitalism
Functioning
Something
Competition
Margins
Series
Profits
System
Attract

More quotes by Jeremy Grantham

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I find the parallels between how some investors refuse to recognise the trends and our reaction to some of our environmental challenges very powerful. There is an unwillingness to process unpleasant data.
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The individual is far better-positioned to wait patiently for the right pitch while paying no regard to what others are doing, which is almost impossible for professionals.
Jeremy Grantham
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Some societies are also more optimistic than others: the U.S. and Australia are my two picks Tell a European you think there’s a housing bubble and you’ll have a reasonable discussion. Tell an Australian and you’ll have World War III. Been there, done that!
Jeremy Grantham
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Capitalism believes that its remit is exclusively to make maximum short-term profits.
Jeremy Grantham
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I would say that financial markets are very inefficient, and capable of extremes of being completely dysfunctional.
Jeremy Grantham
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Investment bubbles and high animal spirits do not materialize out of thin air. They need extremely favorable economic fundamentals together with free and easy, cheap credit, and they need it for at least two or three years. Importantly, they also need serial pleasant surprises in such critical variables as global GNP growth.
Jeremy Grantham
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I like to be right. I try not to miss the big ideas, forget the little ones, and try to get them right. End of job description.
Jeremy Grantham
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Remember that history always repeats itself. Every great bubble in history has broken. There are no exceptions.
Jeremy Grantham
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You don't get rewarded for taking risk you get rewarded for buying cheap assets. And if the assets you bought got pushed up in price simply because they were risky, then you are not going to be rewarded for taking a risk you are going to be punished for it.
Jeremy Grantham
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Modern agriculture has been accurately described as a way of turning oil into food. As the price of oil continues to rise, so will the price of food.
Jeremy Grantham
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The pure administration of Graham-and-Doddery really needs a long-term lock-up like Warren Buffett has, or it will have occasional quite dreadful client problems.
Jeremy Grantham
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We live on a finite planet. We have finite resources, and we're running out of good, arable land.
Jeremy Grantham
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At least us old men remember what a real bear market is like, and the young men haven't got a clue.
Jeremy Grantham
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The world is using up its natural resources at an alarming rate, and this has caused a permanent shift in their value. We all need to adjust our behavior to this new environment. It would help if we did it quickly.
Jeremy Grantham
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Americans are just about the worst at dealing with long-term problems, down there with Uzbekistan, but they respond to a market signal better than almost anyone. They roll the dice bigger and quicker than most.
Jeremy Grantham
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It is better to be lucky than good, but of course appropriate to aspire to both.
Jeremy Grantham
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Battering down solar cells on the roofs of Wal-Marts in California. I think that will be some of the highest-return investments that anyone ever makes.
Jeremy Grantham
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Equities are boring bonds are disgusting.
Jeremy Grantham
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I think I'm right-brained, incapable of managing my way out of a brown paper bag.
Jeremy Grantham
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There is a lot of pain still to be had in the equity markets, particularly aimed at the risky end of the spectrum. We think the fair value on the market is about a third lower in the U.S. . .
Jeremy Grantham