Grantham used to call profit margins the most dependably mean-reverting series in finance.
Resolved true The record shows it happened or was so.
Factual: Statements about the present or the past, checked against the record: did they hold up?
The evidence is the person's or their organisation's own records.
Said for an organisation they lead or work for; it counts on both records.
What would count as true or false
This is a claim about Grantham's own earlier statements. True: a dated earlier writing or interview by Grantham (e.g. a GMO quarterly letter) calls profit margins the most (dependably) mean-reverting series in finance, or uses substantially equivalent wording. Mostly true: he made the same point in slightly different words (e.g. 'probably the most mean-reverting series'). Mixed: he said margins were strongly mean-reverting but never ranked them as the most. Mostly false: he only made weaker or passing remarks on margin mean-reversion. False: records show he never made such a statement, or attributed the view to someone else.
Set before the research began.
Evidence (3)
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E1 I’m Hearing A Lot Of Smart People Use ‘The Four Most Dangerous Words In Investing’ These Days, Part Deux The Felder Report (Jesse Felder) · 11 May 2017
“Grantham has clearly changed his mind about the phenomenon of mean-reversion in the markets.”
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E2 Danger: Steep drop ahead (Sept. 17, 2007) | Fortune Fortune · 17 September 2007 Own record
“They are the most dependably mean-reverting series in finance: If high margins do not attract greater competition, then a wheel has fallen off the capitalist machine.”
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E3 Valuation Based Equity Market Forecasts - Q2 2014 - ReSolve Asset Management ReSolve Asset Management · 14 July 2014
“Profit margins are probably the most mean-reverting series in finance, and if profit margins do not mean-revert, then something has gone badly wrong with capitalism.”
Reasoning
E3 is a Fortune piece from September 2007 that is marked as not independent of Grantham, meaning it carries his own words. It says profit margins "are the most dependably mean-reverting series in finance", which is the same wording as the 2017 claim. E2, an independent source from 2017, says Grantham "has clearly changed his mind" about mean-reversion, which fits his having held the earlier view. E4 uses close wording ("probably the most mean-reverting series in finance"), but the quote does not name who said it, so it adds little weight.
Cite this claim
Jeremy Grantham, “Grantham used to call profit margins the most dependably mean-reverting series in finance.” (said 2017). Verdict: resolved true. Reliability API, claim c_e3ed15e878aa, method 0.1.0+28da144b, dataset release v1.1.2. https://epistacklabs.com/claims/c_e3ed15e878aa
This claim is in dataset release v1.1.2, with the same verdict.
Reply to this claim
More factual claims by Jeremy Grantham
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Mostly false
“the lowest rates in the history of man,”
Bonds currently offer the lowest interest rates in human history.
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Mostly true
“31 years later, the land is not back, and stocks are not back.”
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Mostly true
“one of the two or three lowest relative points in history”
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Mostly true
“Now we have, since ChatGPT and October and November last year, we have a new little flurry of interest that is very concentrated.”
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Mixed
“in 1974 the market did turn up, after a horrific 62% real decline in two years, exactly”
Verdicts are made automatically; how verdicts are made.