Quote

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

Change background

T
T
T

Change font

TAGS & TOPICS

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

More quotes by Jeremy Grantham

Image
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
Image
If stocks are attractive and you don't buy, you don't just look like an idiot, you are an idiot.
Jeremy Grantham
Image
The language it's too late is very unsuitable for most environmental issues. It's too late for the dodo and for people who've starved to death already, but it's not too late to prevent an even bigger crisis. The sooner we act on the environment, the better.
Jeremy Grantham
Image
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
Image
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
Image
Capitalism believes that its remit is exclusively to make maximum short-term profits.
Jeremy Grantham
Image
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
Image
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
Image
Equities are boring bonds are disgusting.
Jeremy Grantham
Image
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
Image
Remember that history always repeats itself. Every great bubble in history has broken. There are no exceptions.
Jeremy Grantham
Image
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
Image
It is better to be lucky than good, but of course appropriate to aspire to both.
Jeremy Grantham
Image
I would say that financial markets are very inefficient, and capable of extremes of being completely dysfunctional.
Jeremy Grantham
Image
I think I'm right-brained, incapable of managing my way out of a brown paper bag.
Jeremy Grantham
Image
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
Image
The stock market is overpriced. Everything is overpriced. Junk is king.
Jeremy Grantham
Image
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
Image
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.
Jeremy Grantham
Image
We live on a finite planet. We have finite resources, and we're running out of good, arable land.
Jeremy Grantham