Magazine article The Spectator

The Perma-Bear Who Sees the Ice Melting

Magazine article The Spectator

The Perma-Bear Who Sees the Ice Melting

Article excerpt

We're barely ten seconds into our interview when Jeremy Grantham, onetime bedpan salesman from Doncaster, now hugely successful US money manager, is off on a favourite tack -- mixing it with his competitors in the investment world. In this case what has drawn his ire are some reported comments from a well-known American fund manager whose views I have alluded to in a recent newspaper column.

'I'm going to start with an ad hominem remark, ' he announces down the line from Boston, his adopted home, where he has built from scratch a global fund management business that looks after more than $140 billion of other people's money. The pundit in question, he says, 'is the biggest historical revisionist around. Everything he said he has predicted is plain wrong. . . . Every one of his arguments is flat-out wrong.' Then we're off on a five-minute discourse on the inadequacies of the said pundit, whose byline has adorned a hundred columns in Forbes magazine. After cataloguing a string of alleged misreasonings, Grantham concludes: 'I've told you everything already about the kind of guy I am. I'm a vindictive son of a bitch who never forgets.' Grantham left these shores more than 40 years ago to do an MBA at Harvard and never found time to return. 'By background I'm both a Quaker and a Yorkshireman, which I like to call double jeopardy.' He means that the spirit of 'waste not, want not' and calling a spade a spade is ever present in his life. 'I cannot even pay for dinner myself.

My wife has to pay the check.' The hardest thing he has ever had to do, he goes on, is to tell his English stepfather that he was not going to carry on flogging bedpans for the latter's modest hospital supply business, but plough his own path instead. After Harvard Business School, where he learnt how to speak confidently in public but nothing about the stock market, he migrated to Wall Street -- where he was soon wiped out financially by a speculative stock that nosedived, taking his savings with it. The experience of the 1960s stock-market bubble stayed with him and shaped his investing philosophy.

If Grantham comes over as an embattled loner -- a Geoffrey Boycott of the investment world -- that is happily not the case.

His quarterly letters to investors are treasured by devotees as much for their edgy wit as for their insights into future market performance. And you clearly cannot build a business as successful as GMO, his Bostonbased firm, without the ability to inspire those around you. According to Barton Biggs, former head of Morgan Stanley's asset-management business in New York, Grantham is 'a seeker of truth. He doesn't care what the world thinks. He has a hard glitter to him, if you know what I mean.'

Although well into his sixties, Grantham is as committed and trenchant in his views today as he has ever been. Until a few years ago, when injury stopped him, he was still playing soccer in a tough pickup game in Boston. He now has two big passions, the state of the financial markets and climate change -- and on both scores he finds himself in Cassandra mode, at loggerheads with mainstream US opinion.

One of Grantham's claims to fame is that he, as much as anyone, proved the case for timber as an asset class for mainstream investors, and this led him to take a deep interest in climate change. When I innocently inquire whether he has strong views on the subject, he replies, 'Goddam right I do. …

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