Episode
Jeremy Grantham on AI, Bubbles and Why Mean Reversion Lives On
- Podcast
- Excess Returns
- Published
- May 16, 2026
- Duration seconds
- 3864
- Processing state
not_requested
Actions
POST https://stenobird.com/v1/public/podcasts/excess-returns-902655/episodes/jeremy-grantham-on-ai-bubbles-and-why-mean-reversion-lives-on/transcription-requests
Idempotently request low-priority transcript generation for this episode.GET https://stenobird.com/podcast/excess-returns-902655/jeremy-grantham-on-ai-bubbles-and-why-mean-reversion-lives-on.md
Read the agent-friendly Markdown representation of this episode resource.
Summary
Jeremy Grantham joins Excess Returns to discuss The Making of a Permabear, mean reversion, market bubbles, AI, the Magnificent 7, and the long-term lessons investors can take from his career at GMO. We cover why he rejects the simple “permabear” label, how he thinks about valuation and bubbles, why AI may be both transformative and dangerous for investors, and why long-term thinking is so hard but so essential. The Making of a Permabear: The Perils of Long-term Investing in a Short-term World https://groveatlantic.com/book/the-making-of-a-permabear/ GMO https://www.gmo.com/americas/ Grantham Foundation https://granthamfoundation.org/ Topics covered: Why Jeremy Grantham thinks the “permabear” label misses the point The difference between being generally bearish and making a true “abandon ship” call Mean reversion, valuation cycles, and why history still matters for investors Why monopoly power helped reshape U.S. profit margins and market concentration How AI could turn today’s monopoly winners into brutal competitors Why new technology often becomes a cost of doing business rather than a permanent profit boost How Grantham defines bubbles using two-sigma market events Lessons from Japan, the dot-com bubble, the housing bubble, and the 2021 speculative peak Why institutional investors struggle to stick with value strategies during bubbles The role of purpose, climate risk, toxicity, and long-term thinking in Grantham’s later career The one lesson Grantham would teach ordinary investors about pessimism, realism, and time horizons Timestamps: 00:00 Jeremy Grantham on unpleasant news and long-term investing 04:18 Reinvesting when terrified in 2009 08:43 Why Grantham told investors to abandon ship in 2008 10:28 Mean reversion and why history matters 14:00 Monopoly power, th…