Holders typically love it when asset prices rise far above long-term norms. But gains accidentally made in the bubble phase are always taken back in the bursting, and most participants are left worse off in the end. Believe it or not. As Grantham puts it “sooner or later, you will have made money to have sidestepped the bubble phase.” Meanwhile, saving, spending discipline, and compounding time, most relevant in individual lifespans, lost forever.
Our guest this week is Jeremy Grantham. Jeremy is the long-term investment strategist at his namesake firm, Grantham, Mayo, Van Otterloo & Co., or GMO, which he co-founded in 1977. He serves on GMO’s Asset Allocation Committee and board of directors. Here is a direct video link.
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