Jeremy Grantham's old quarterly newsletters (archived)


Jeremy Grantham is the founder of GMO, one of the biggest quant hedge funds. GMO has more than $100 billion under management. Jeremy has been instrumental in my trading journey. He taught me that predicting the U.S. stock market’s long term direction is all about valuations + understanding the economy.
Jeremy used to publish a quartlerly newsletter on his GMO.com website. However, the website doesn’t maintain copies of its historical quarterly newsletters.
Over the years I have been able to accumulate Jeremy’s historical newsletters from 1997 – present. These newsletters are highly insightful. Reading his thought process during various market stages will help you piece together a solid trading strategy for the U.S. stock market.
Click here to download his quarterly newsletters as a ZIP file (open the ZIP file and you’ll find all the PDF’s).
These days, Jeremy Grantham is semi-retired, so he doesn’t write often in GMO’s quarterly letters anymore. GMO’s letters are now mostly written by Ben Inker,

Jeremy Grantham’s lesson from 1997

Jeremy Grantham has a really good track record at picking major tops and bottoms. For example, he came close to nailing the March 2009 exact bottom, the 2007 top, and the 2003 bottom.
However, Grantham was too early when it came to predicting the dot-com bubble’s top. (This was the same for many hedge funds. Almost all of the greatest investors and traders turned long term bearish in 1997 – 1998. They thought the August – September 1998 “big correction” was the start of a mega-crash bear market. It wasn’t. The bear market continued another 2 years until 2000).
Jeremy Grantham turned long term bearish on the U.S. stock market in 1997 because the U.S. stock market was “overvalued”.

As you know, the U.S. stock market went up after 1997 to 2000. When the stock market finally did “crash”, it only fell back to where it was in 1997.

From being too early to call the top, Jeremy Grantham learned that it’s better to sell on the way down than to sell on the way up. It’s better to sell after you’re certain the top is already in than to try and predict the top on the way up. Because you are much more likely to sell too early than to sell too late. Selling too early (i.e. before the top) is exactly the same thing as selling too late (i.e. after the top).

Learn from Jeremy Grantham’s newsletters

Even though Jeremy Grantham failed to predict the 2000 top accurately, most of his long term calls have been accurate. Read Jeremy Grantham’s old newsletters and learn how he combines valuations with fundamentals to predict the stock market’s long term direction.

  1. The stock market and economy (fundamentals) move in the same direction in the long term.
  2. Valuations tell you where you are in the long term cycle. E.g. high valuations means that this is late in the bull market, whereas low valuations means that this is late in the bear market.

*Grantham’s definition of “long term” is 7 years. He wants to know where the stock market will be in 7 years from today.

6 comments add yours

  1. I don’t believe my eyes!! You said it and you did it!! I can not thank you enough!! It is unbelievable!! I love you man!! You are a man of your word!!! I love your ethics and especially the way you think about the market. I want someday to meet you and spent time with you talking about everything that interests you. I consider my self very lucky to find you in all of this chaos of guys talking about things that they don’t know. I want so much to understand how the markets work and you are helping me to materialize my dream. It is NOT for the money! It is a wonderfull mind game. Market is a dynamic-very compex system, so it is a chalenge for me to find the rules that Mr Market plays his game!!!
    Have a nice day!!!

  2. Awesome, thanks for compiling these. Is there really not a GMO website where they’re posted/kept up to date? A quick search turned up your site before any “official” one

Leave a Comment