Long new profile of GMO investor Jeremy Grantham in the weekend NYT Magazine. His views are well known here — limits, resources, etc. — and so this is mostly to provide background and context. He is smart, a nuanced thinker, and a graceful writer, all of which come through in the piece.
Some will immediately say, of course, that this marks the end of the current commodities cycle. Others will simply nod in agreement. Either way, it’s worth a read.
Grantham’s quarterly letters often do make predictions about how the market will perform in the near future and recommend moves investors can make right now, but there are plenty of other authoritative voices telling us whether the recovery will continue or how the S&P will do this year. What sets him apart is what Ritholtz calls “the view from 40,000 feet up.” Grantham, the public face of a company that manages more than $100 billion in assets, the very embodiment of a high-finance insider in blue blazer and yellow tie, has serious doubts about capitalism’s ability to address the biggest problems facing humanity. When he reminds us that modern capitalism isn’t equipped to handle long-range problems or tragedies of the commons (situations like overfishing or global warming, in which acting rationally in your own self-interest only deepens the harm to all), when he urges us to outgrow our touching faith in the efficiency of markets and boundless human ingenuity, and especially when he says that a wise investor can prosper in the coming hard times, his bad news and its silver lining come with a built-in answer to the skeptical question that Americans traditionally pose to egghead Cassandras: If you’re so smart, how come you’re not rich?