Jeremy Grantham on AI, Bubbles and Why Mean Reversion Lives On

Investment success relies on recognizing mean reversion and identifying market bubbles, which historically occur when economic conditions are near-perfect and capital is abundant. Jeremy Grantham, a veteran investor and author of *The Making of a Permabear*, argues that while the "Magnificent Seven" companies currently exhibit monopoly-like dominance, the aggressive, AI-driven competition they face will eventually normalize profit margins, as new technologies inevitably become standard costs of doing business. Investors must combat the inherent human bias toward short-termism and optimism, as market extremes—such as the 1980s Japanese bubble or the 2000 tech crash—consistently revert to long-term trends. Beyond financial strategy, Grantham advocates for purpose-driven careers that address systemic global risks, including climate change and environmental toxicity, emphasizing that long-term survival requires realistic assessment rather than systematic avoidance of unpleasant news.