From The Wharton Journal:
"Career risk and bubbles breaking, that is all that matters."HT: Value Investing World
This was how Jeremy Grantham, cofounder, Chairman and active member of the asset allocation division of GMO, began his presentation to Wharton students on February 17, 2009. Thanks to the recurring "Speaker Series" sponsored by Wharton's Investment Management Club, students were invited into a colorful discussion about stock market bubbles and market in-efficiency. These are topics that are typically taboo in our finance classrooms, perhaps with the exception of Professor Franklin Allen's FNCE 601 class where bubbles were in fact discussed.
So how does Mr. Grantham feel about how most universities cover market efficiency? He began to address this topic by saying "science advances one funeral at a time," which was a famous statement made by Max Planck, the late German physicist. Mr. Grantham continued by commenting on how a University of Pennsylvania alumnus, Mr. Charles Kindleberger, once claimed that academics too often ignore the facts in defense of a theory. This makes sense given that Mr. Kindleberger was an economic historian. In fact in his book Manias, Panics, and Crashes, he relied on narrative exposition and knowledge of history rather than mathematical models to prove his point....MORE