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The Making of a Permabear: The Perils of Long-term Investing in a Short-term World
From the legendary investor renowned for his ability to spot bubbles comes a brilliant account of a storied career as well as a vivid history of the stock market over the last sixty years
Raised in a Yorkshire coal-mining town, Jeremy Grantham once won seven games of Monopoly in a single evening—he figured out the most efficient properties on the board and went all in. So begins the story of an iconoclastic investment career launched into the stratosphere by a few simple buy cheap, watch for bubbles, and stick to your guns when you know you’re right.
Deep curiosity about the history of markets kept Grantham one step ahead. He created one of the first index funds in the 1970s, pioneered quantitative investment in the 1980s, and embraced emerging markets before other firms saw their potential. Grantham became famous when he accurately predicted and sidestepped a series of bubbles, but he learned by painful experience why so few others “It is terrible business to blow the whistle on a major bull market.” His firm skyrocketed from $250 million to a peak of $155 billion in assets under management. But as his wealth grew, so did his concerns about the deficiencies of capitalism and the unfolding climate crisis. He decided—at the top of his game—to donate nearly all his wealth to environmental protection.
With wit that’s as cutting against himself as his critics, Grantham reveals how hunting for bargains requires understanding the inefficiencies of the market and the human behavior that drives it. When resisting the bull market of the late 1990s, Grantham lost clients in droves before his bearish call was vindicated. “The best ideas eventually come out on top,” he says, “but sadly there's no guarantee you won't go out of business waiting.” That you might lose your job for being right is at the root of the short-term thinking that dominates the investment world. Such thinking also has disastrous consequences for the planet and mankind's long-term future. Ultimately, Grantham offers a deeply human, often heretical, and quietly profound lens on investing today.
Raised in a Yorkshire coal-mining town, Jeremy Grantham once won seven games of Monopoly in a single evening—he figured out the most efficient properties on the board and went all in. So begins the story of an iconoclastic investment career launched into the stratosphere by a few simple buy cheap, watch for bubbles, and stick to your guns when you know you’re right.
Deep curiosity about the history of markets kept Grantham one step ahead. He created one of the first index funds in the 1970s, pioneered quantitative investment in the 1980s, and embraced emerging markets before other firms saw their potential. Grantham became famous when he accurately predicted and sidestepped a series of bubbles, but he learned by painful experience why so few others “It is terrible business to blow the whistle on a major bull market.” His firm skyrocketed from $250 million to a peak of $155 billion in assets under management. But as his wealth grew, so did his concerns about the deficiencies of capitalism and the unfolding climate crisis. He decided—at the top of his game—to donate nearly all his wealth to environmental protection.
With wit that’s as cutting against himself as his critics, Grantham reveals how hunting for bargains requires understanding the inefficiencies of the market and the human behavior that drives it. When resisting the bull market of the late 1990s, Grantham lost clients in droves before his bearish call was vindicated. “The best ideas eventually come out on top,” he says, “but sadly there's no guarantee you won't go out of business waiting.” That you might lose your job for being right is at the root of the short-term thinking that dominates the investment world. Such thinking also has disastrous consequences for the planet and mankind's long-term future. Ultimately, Grantham offers a deeply human, often heretical, and quietly profound lens on investing today.
416 pages, Hardcover
Published January 13, 2026
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Displaying 1 - 22 of 22 reviews
February 27, 2026
The core lesson is also its blind spot: being right at the wrong time is the same as being wrong. Stories are there but not the solution.
His strategy is multi-year mean reversion. Buy cheap, wait, get vindicated. But it never seriously asks: what if the mean itself has moved? Passive indexing, zero-cost information, tech platform economics, structural shifts in interest rates. These aren't noise. They're regime changes. They are treated as distractions rather than challenges.
Position sizing, the actual hard problem of contrarian investing, gets no attention. When do you go all in on a thesis that might take five years while clients leave after two? The interesting thinking/engineering is missing.
Finally the pivot to environmental philanthropy. His career shows markets punish long-term thinking but he asks those same markets to care about the planet on a 50-year horizon. You can't diagnose a system with a 30-second timeout and prescribe patience as the cure. Where is the incentive design? He skips from diagnosis to moral appeal, walking past the gap that matters most.
Skip it if you are already familiar with bubble timelines or expect solutions to the problems it raises.
His strategy is multi-year mean reversion. Buy cheap, wait, get vindicated. But it never seriously asks: what if the mean itself has moved? Passive indexing, zero-cost information, tech platform economics, structural shifts in interest rates. These aren't noise. They're regime changes. They are treated as distractions rather than challenges.
Position sizing, the actual hard problem of contrarian investing, gets no attention. When do you go all in on a thesis that might take five years while clients leave after two? The interesting thinking/engineering is missing.
Finally the pivot to environmental philanthropy. His career shows markets punish long-term thinking but he asks those same markets to care about the planet on a 50-year horizon. You can't diagnose a system with a 30-second timeout and prescribe patience as the cure. Where is the incentive design? He skips from diagnosis to moral appeal, walking past the gap that matters most.
Skip it if you are already familiar with bubble timelines or expect solutions to the problems it raises.
January 31, 2026
Grantham is a stock market investor, philanthropist, and advocate for doing something about global warming. His arguments for limiting economic growth and for fighting global warming are cogent, and may carry weight with audiences that listen to billionaires who understand business.
There are some good reminders for value investors in here about not going along with the bewildered herd. It was interesting how none of the pension funds and such that fired him during bubbles went back to him after the bubbles burst. This is a combination of the "déformation professionelle" and career risk of money managers; for them, it's better to be wrong with the crowd and lose their customers' money than to be right all alone. People are often irrational, and the market is very obviously inefficient at times, even though the conventional wisdom on Wall Street and among famous economists is the Efficient Market Hypothesis. Grantham is not really a "permabear." He's a value investor who cries wolf when he thinks things are overvalued. He's been right (albeit early) multiple times.
He seems to have honestly enjoyed the puzzle-solving aspects of investing, being an early developer of things like index funds, quant investing, etc. However, he leaves a clear impression that it is very sad and wasteful to have so many of our best and brightest go to work on Wall Street in a zero-sum industry that produces nothing but has negative externalities for the economy and the environment.
There are some good reminders for value investors in here about not going along with the bewildered herd. It was interesting how none of the pension funds and such that fired him during bubbles went back to him after the bubbles burst. This is a combination of the "déformation professionelle" and career risk of money managers; for them, it's better to be wrong with the crowd and lose their customers' money than to be right all alone. People are often irrational, and the market is very obviously inefficient at times, even though the conventional wisdom on Wall Street and among famous economists is the Efficient Market Hypothesis. Grantham is not really a "permabear." He's a value investor who cries wolf when he thinks things are overvalued. He's been right (albeit early) multiple times.
He seems to have honestly enjoyed the puzzle-solving aspects of investing, being an early developer of things like index funds, quant investing, etc. However, he leaves a clear impression that it is very sad and wasteful to have so many of our best and brightest go to work on Wall Street in a zero-sum industry that produces nothing but has negative externalities for the economy and the environment.
January 23, 2026
"4 stars" for being a very insightful book describing a lot of history of the investment industry in the last 60 years. "5 stars" for serious long term investors interested in gaining insights. He recounts the ups and downs in his career and how he became highly successful despite thinking like a contrarian and going against traditional investment industry professionals. Has invaluable insights on market bubbles for investors, traders and novices alike in the stock market, of particular interest in the current environment!!
Also has some very good points on preservation of the environment and on climate change as well. I do intend to find out more about his charitable Foundation [https://www.granthamfoundation.org/ ] and what they are doing.
Highly recommend the audio version of this book as it has been narrated by the author himself and it is almost like he is talking to you and recounting his experience and thoughts!!
Also has some very good points on preservation of the environment and on climate change as well. I do intend to find out more about his charitable Foundation [https://www.granthamfoundation.org/ ] and what they are doing.
Highly recommend the audio version of this book as it has been narrated by the author himself and it is almost like he is talking to you and recounting his experience and thoughts!!
June 16, 2026
As background, I have a positive view of Jeremy Grantham because:
-GMO has had a good and systematized version of value for about 3 decades (and before that I think it was still good, just not systematized)
-About 10-15 years ago, I enjoyed and learned from his series of letters on possible commodity shortages
-He's done good work in the environmental space
This book was disappointing relative to my expectations, although not hugely so.
On the positive side, it was a nice walk through his history. He's been genuinely very early and influential in quite a few important things, including (a) indexing, (b) systematizing a value process, (c) combining value and momentum, (d) using "quality" as a metric, and (d) various environmental issues.
But he's also really over-confident that he's correct and dismissive of almost all academics and economists, thinks notions like "beta" are nonsense, etc. I can see arguments for his positions, but it wasn't just that I thought he was wrong, it's that his criticisms weren't very rigorous, it seems like 50% analysis and 50% name-calling. There were some correlation = causation errors, etc. This really brought the book down in what I felt like I could learn from it, since on topics with which I am less familiar I'm not as likely to notice where he's making weird assumptions or not mentioning other important data (to be clear, I think he's an honorable guy and is not purposely hiding important offsetting data, I just think my view of what constitutes important data pointing in the other direction could well be different than his), and so I just have to have a low belief overall.
There's an interesting section toward the end where he talks about current-ish markets and the idea that long-term mean reversion could be broken. He's been a strong believer in it his whole life, for example that index level (and single stock level) corporate profit margins mean revert since high margins attract new entrants or at least competition and new spending among existing players. Around 2018-9 he was saying things like "well this looks like a bubble on valuation metrics but it is not acting like a bubble in terms of frothy behavior and also maybe corporate profits won't mean revert because there's more monopoly power now plus more stock-based compensation plus strong market signals to return capital rather than invest it", which seems like a pretty good analysis to me. Also he noted that maybe he had gotten lulled into a false sense of "value always works in the end" just because 1935 to 2000 was effectively his training period and his production period and it happened to be a period with a lot of macro stability, which again seemed like a good thought to have. But then he progressed to "but by 2021 it was obviously just a bubble" and he kind of lost me.
Overall I'd say marginally worth reading conditional upon having an interest in the topic, but not otherwise
-GMO has had a good and systematized version of value for about 3 decades (and before that I think it was still good, just not systematized)
-About 10-15 years ago, I enjoyed and learned from his series of letters on possible commodity shortages
-He's done good work in the environmental space
This book was disappointing relative to my expectations, although not hugely so.
On the positive side, it was a nice walk through his history. He's been genuinely very early and influential in quite a few important things, including (a) indexing, (b) systematizing a value process, (c) combining value and momentum, (d) using "quality" as a metric, and (d) various environmental issues.
But he's also really over-confident that he's correct and dismissive of almost all academics and economists, thinks notions like "beta" are nonsense, etc. I can see arguments for his positions, but it wasn't just that I thought he was wrong, it's that his criticisms weren't very rigorous, it seems like 50% analysis and 50% name-calling. There were some correlation = causation errors, etc. This really brought the book down in what I felt like I could learn from it, since on topics with which I am less familiar I'm not as likely to notice where he's making weird assumptions or not mentioning other important data (to be clear, I think he's an honorable guy and is not purposely hiding important offsetting data, I just think my view of what constitutes important data pointing in the other direction could well be different than his), and so I just have to have a low belief overall.
There's an interesting section toward the end where he talks about current-ish markets and the idea that long-term mean reversion could be broken. He's been a strong believer in it his whole life, for example that index level (and single stock level) corporate profit margins mean revert since high margins attract new entrants or at least competition and new spending among existing players. Around 2018-9 he was saying things like "well this looks like a bubble on valuation metrics but it is not acting like a bubble in terms of frothy behavior and also maybe corporate profits won't mean revert because there's more monopoly power now plus more stock-based compensation plus strong market signals to return capital rather than invest it", which seems like a pretty good analysis to me. Also he noted that maybe he had gotten lulled into a false sense of "value always works in the end" just because 1935 to 2000 was effectively his training period and his production period and it happened to be a period with a lot of macro stability, which again seemed like a good thought to have. But then he progressed to "but by 2021 it was obviously just a bubble" and he kind of lost me.
Overall I'd say marginally worth reading conditional upon having an interest in the topic, but not otherwise
June 4, 2026
Not a bad book but it got less interesting as he got more successful. Or possibly, I just got tired of him. The first half was very interesting. Read because I liked him on a podcast
- He grew up during WWII and post-war rationing. They only had "exotic" things like oranges at Christmas. Candy came off the ration list when he was nine, and on that day they drove around from shop to shop trying to buy whatever they could.
- He proposed to his wife over the phone. She was in the dining room with her family who did not approve (she was German and he was English), so she said "oh, yes. How are you?" so they wouldn't catch on
- He helped create one of the first index funds, pre-Bogle. Not because he thought the markets were efficient, but just to reduce fees.
- He called the tech bubble, but too early so he lost a lot of clients as the market continued to rip in 1998 and 1999. Then he seems to have overlearned that lesson and has been calling everything a bubble since
- The end of the book is about his environmental efforts. While they are probably doing a lot of good, it was written in a very doom and gloom manner and not very convincing, even to me who is predisposed to agree with him
- He grew up during WWII and post-war rationing. They only had "exotic" things like oranges at Christmas. Candy came off the ration list when he was nine, and on that day they drove around from shop to shop trying to buy whatever they could.
- He proposed to his wife over the phone. She was in the dining room with her family who did not approve (she was German and he was English), so she said "oh, yes. How are you?" so they wouldn't catch on
- He helped create one of the first index funds, pre-Bogle. Not because he thought the markets were efficient, but just to reduce fees.
- He called the tech bubble, but too early so he lost a lot of clients as the market continued to rip in 1998 and 1999. Then he seems to have overlearned that lesson and has been calling everything a bubble since
- The end of the book is about his environmental efforts. While they are probably doing a lot of good, it was written in a very doom and gloom manner and not very convincing, even to me who is predisposed to agree with him
March 2, 2026
This was really good. One of my most highlighted books ever upon first-read. Grantham is, without a doubt, a pioneer of our industry and a genius and this was well worth my time reading.
With that being said, he has been shouting from the rooftop about elevated valuations for over a decade now; staking his reputation on eventual mean reversion that just hasn't happened in a world where market-cap weighted passive indices continue to buy businesses with every incremental addition of capital at ever-increasing valuations irrespective of fundamentals. I side with Mike Green's thoughts here that rather than mean-reversion we are seeing mean-expansion, and will continue to see it until passive equity ownership reaches the breaking point.
Lastly, while I think Grantham is one of the great investing minds of the most recent generation, he frequently often comes across in public speaking, and occasionally in this book, as unwilling to lend any credence to any counterarguments that might be made. It could just be old age. Either way, it was a very good book.
With that being said, he has been shouting from the rooftop about elevated valuations for over a decade now; staking his reputation on eventual mean reversion that just hasn't happened in a world where market-cap weighted passive indices continue to buy businesses with every incremental addition of capital at ever-increasing valuations irrespective of fundamentals. I side with Mike Green's thoughts here that rather than mean-reversion we are seeing mean-expansion, and will continue to see it until passive equity ownership reaches the breaking point.
Lastly, while I think Grantham is one of the great investing minds of the most recent generation, he frequently often comes across in public speaking, and occasionally in this book, as unwilling to lend any credence to any counterarguments that might be made. It could just be old age. Either way, it was a very good book.
April 9, 2026
A very interesting career with investment management. Grantham's early ideas around indexing and the shift from a successful fundamental investor to a macro investor and asset allocator stand out. I find his perspectives on regression to the mean for profitability interesting in today's tech monopoly world. Different this time? Perhaps the idea that most resonated with me was the comfort index model that they came up with at GMO - so true to the way market cycles work. The willingness and almost joy of standing out from the herd is admirable but also probably cost GMO being a top tier firm in terms of assets and profits. Someone as smart as Grantham if he chose to play the 'career risk' game would have grown the firm into a giant. The end warnings about climate change and finite resources are even more depressing to contemplate in the geopolitical environment. Hopefully geothermal and AI work.
February 21, 2026
One of the better memoirs by a Wall Street big shot that I've read. Grantham writes with a nice, wry sense of humor which really adds to his memoir. Grantham is a contrarian who has his own investing views and sticks to them no matter the pain and stress it causes him and his firm. I particularly enjoyed sections discussing his schooling, building his business, and the trials and tribulations of market bubbles. Recommended for a beginning stock market investor who wants to learn how to invest in the market. But also recommended for anyone who wants to read about the interesting experiences of a Wall Street giant and lifelong investing contrarian.
April 8, 2026
Grantham has always been an admired contrarian, and his ability to foresee reversions to the mean have been impressive (if not timely). The book is an entertaining backstory of his investment career.
The book also smacks of hypocrisy to me as Grantham eschews the global destruction he says are inherent to capitalism (he’s probably correct), plus laments the social inequities of the world; yet all the while he has grown fabulously wealthy from the former and is unwilling to divest of his assets towards the latter (though his foundation has).
The book also smacks of hypocrisy to me as Grantham eschews the global destruction he says are inherent to capitalism (he’s probably correct), plus laments the social inequities of the world; yet all the while he has grown fabulously wealthy from the former and is unwilling to divest of his assets towards the latter (though his foundation has).
February 26, 2026
4 stars for the long term view of the stock market (gives a bit too much importance to too sophisticated models with hindsight bias).
3 stars for the climate change views (identifies the problem correctly, but then goes on a slippery slope of opinions converted into facts about solutions).
2 stars for the health views (clearly above his pay grade, spends too much time majoring the minors with a fearmongering speech).
3 stars for the climate change views (identifies the problem correctly, but then goes on a slippery slope of opinions converted into facts about solutions).
2 stars for the health views (clearly above his pay grade, spends too much time majoring the minors with a fearmongering speech).
February 23, 2026
The experience of very accomplished hedge fund manager is interesting, especially of a few times he failed. I didn't like the style it was written, like somebody just transcribed his talk. Also the last quarter of the book is devoted to his passion for environmental causes that he developed late in his life. The relevance to investing - which is how this book is presented - is questionable.
February 28, 2026
An interesting book about Grantham and the establishment of GMO—and, not least, about how bubbles start, develop, and burst. However, he seems almost obsessed with bubbles.
The final part of the book, where he turns to the need for ESG, the green transition, and the pursuit of growth, borders on the tedious. This section could easily have been left out.
March 28, 2026
The first half of the book was propulsive, clear, and thoughtful. The second half really dragged, especially as Grantham’s writing meandered from subject to subject. While I am glad I read the book, I eventually got very tired of his “I was right about everything, even when people thought I wasn’t” pose.
June 14, 2026
I acknowledge, the author is arrogant, his writing is haphazard and hard to follow, some of his points are anachronistic; this said, this is one of the must read financial history / investment books. The books gives an tremendous perspective about changes to the markets while noting their unchanging features. There are lessons to be learned and unlearned.
March 20, 2026
I have always appreciated that down to earth views of Mr. Grantham. And given that he is a man who has called the last two bubbles , all of which exploded spectacularly, he is a real breath of fresh air as the market climbs ever higher.
Ps yes he believes we are in the midst of one right now.
Ps yes he believes we are in the midst of one right now.
Want to Read
February 3, 2026The making of a Permabear — Jeremy Grantham’s guide to booms, busts and popping market bubbles - https://www.ft.com/content/51e3c51b-d... via @FT
May 6, 2026
3.5*
May 8, 2026
Very interesting history of Grantham’s start in the industry, building GMT and pioneering quant investing. However, gets very preachy about his political/religious beliefs throughout the last third.
May 14, 2026
Quite good-interesting view on markets and life from a value investor
June 10, 2026
A Fascinating History by a Seasoned and Principled Investor
An excellent read that kept me engaged and educated me about the financial environment in which I live. I Recommend.
An excellent read that kept me engaged and educated me about the financial environment in which I live. I Recommend.
July 10, 2026
More of a biography with very interesting details on the investment business and its development in the last 60 years.
If you're looking for investment advice and the new secret trick: not in here.
If you're looking for investment advice and the new secret trick: not in here.
April 8, 2026
It is fun to read, if you are interested in investing. Unlike the book title, he is not permabear. He is just too rational.
If you have thought about investing, this book has so much wisdoms to agree and I did. That's why I enjoyed a lot.
If you have thought about investing, this book has so much wisdoms to agree and I did. That's why I enjoyed a lot.
Displaying 1 - 22 of 22 reviews