Ben Inker — Jeremy Grantham’s Heir Apparent on the Future of Asset Allocation

Published on
September 24th, 2020
64 minutes

Reinventing the Monetary System with Decentralized Finance

Ben Inker — Jeremy Grantham’s Heir Apparent on the Future of Asset Allocation

The Interview ·
Featuring Ben Inker

Published on: September 24th, 2020 • Duration: 64 minutes

Everyone knows Jeremy Grantham as the face of GMO, the behemoth money manager that has become legendary for its work on asset allocation, but Ben Inker, head of asset allocation at GMO since 1998, seems to be next in line for the throne. In this interview with Ed Harrison, Inker helps viewers make sense of the post-COVID investment landscape from the perspective of a major asset allocator. Together they discuss everything from the future of the 60/40 portfolio to bonds as an asset class in this new low rate world. They also dig in to US vs. non-US assets, the trouble with popular ex-post facto explanations for FAANG outperformance and narrative bubbles like Tesla, and why the financial sector can be so difficult to value. Filmed on September 21, 2020.



  • JE
    John E.
    1 November 2020 @ 22:47
    Thanks, Looking forward to seeing Ben again. GMO, thoughtful, and long term.
  • RB
    Rahul B.
    27 September 2020 @ 23:30
    I turned this off the moment he described Tesla as a “manufacturer”. Bring on guests who actually understand the companies.
    • AG
      Amol G.
      21 October 2020 @ 18:58
      I know right. I mean, who is he to talk about companies and assets. He's only the Head of Asset Allocation of one of the best investment firms and heir apparent of Jeremy Grantham. On top of that, he's ONLY been: An analyst on GMO's quantitative equity and asset-allocation teams, a portfolio manager of various equity and asset-allocation portfolios the firm offers, co-head of international quantitative equities, and CIO of quantitative developed equities. Ben is also a CFA charterholder. But ya- let's bring on other guests "who actually understand the companies"
  • AH
    Andrew H.
    21 October 2020 @ 17:19
    I love Ben and Jeremy, but I am not certain that this discussion brought conclusions for how to use their framework in todays environment. eg I am not certain we have a world where interest rates will increase materially in the next seven years. Good for relative value which may be very important, but not sure it was the most value contextually for this policy/ economic backdrop. JMHO
  • SB
    Stewart B.
    7 October 2020 @ 16:44
    This could be the best interview yet. Thank you.
    • MW
      Max W. | Real Vision
      21 October 2020 @ 14:20
      We have just confirmed Mike Green will be interviewing the man himself. Jeremy Grantham in mid-november
  • MV
    Mathieu V.
    24 September 2020 @ 17:00
    About Tesla I think he is missing a HUGE point. They are not only selling cars... they are selling smart cars ! The car and therefore Tesla will know where everyone is going to, how long did they spend there etc etc.... They will be able to drive you to a place you didn't know you even wanted to... That will be the first place where advertisers will want to put ads in.
    • CB
      Clifford B.
      24 September 2020 @ 18:01
      Just what every car owner will want or allow. Adds popping up on their in car screens.
    • RM
      Robert M.
      25 September 2020 @ 03:44
      Some of us actually enjoy driving cars. And not looking for ads to entertain me.
    • SB
      Stewart B.
      7 October 2020 @ 16:54
      And, Tesla is priced assuming there will be no competition, or legal problems with adoption of FSD. See my note above, but FSD is decades away owing to legal issues.
  • MB
    Michal B.
    24 September 2020 @ 18:34
    TSLA sold 500k cars per year, NKLA sold 0 cars. And he puts them in the same category 🤦‍♂️🤦‍♂️🤦‍♂️ That guy is hopeless. He would miss AMZN, GOOG, FB
    • MB
      Michal B.
      24 September 2020 @ 18:47
      and he doesn't understand machine learning. TSLA has billions of miles for FSD training. The next competitor GOOG has like 10 million and they are abandoning the project because they know they can't compete with TSLA.
    • LC
      Luis C.
      24 September 2020 @ 21:52
      I agree with you Michal B. I think he needs to look into the technology a bit more. If anyone is getting to FSD, it's going to be Tesla due to their neural networks.
    • AM
      Alonso M.
      24 September 2020 @ 22:14
      There's a difference between TSLA and Tesla. I think that's what he was mostly referring to.
    • OA
      Olivier A.
      24 September 2020 @ 22:19
      Interesting. Can I ask what FSD is?
    • TM
      The-First-James M.
      25 September 2020 @ 00:21
      Michal B, since when have Google abandoned the Waymo project? I don't think the FSD narrative you're quoting is correct. It sounds as if you're parroting Cathie Wood from ArkInvest, and based on what I've read about this, the miles driven data narrative is pure hokum WRT FSD.
    • RM
      Robert M.
      25 September 2020 @ 03:43
      Can't imagine GOOG abandoning anything because of TSLA. They are in a much stronger capital position and can attach any market they would like.
    • MB
      Michal B.
      25 September 2020 @ 08:39
      GOOG is selling equity of waymo to outside investors: GOOG has enough money but their training miles are insanely expensive because they need to pay engineers to drive the cars. TSLA sells a car makes profit on it and gets the training data from their customers for free. GOOG data collection strategy is unsustainable. The-First-James M. any machine learning expert will tell you that more data is better. More data is actually the only way of improving. Can't it be that I understand machine learning and came independently to the same conclusion as ARK? If two people agree it's not proof that it is wrong.
    • JW
      J W.
      27 September 2020 @ 07:12
      FSD = Fully Self Driving cars
    • SB
      Stewart B.
      7 October 2020 @ 16:50
      It is worth considering that while FSD technology is close to ready, we are perhaps many decades away from adoption. This is mainly due to legals. If you can get sued for millions for selling a coffee that is too hot, imagine the field day lawyers will have over FSD. For example, if faced with the choice of losing a life, should the FSD choose to kill the driver, or a pedestrian? Driver or passenger? A dog or writing off the vehicle? And then consider if accidentally or by a systematic bias in the training data, the FSD makes a decision to sacrifice the life of a person of a specific race or gender, to save another? Remember the problem Google Images had with searches for monkeys? But, it gets worse. Once a legal verdict is reached, is it the 'driver', owner or manufacturer that is to be held responsible?
  • SG
    Sashi G.
    5 October 2020 @ 09:13
    This is a great interview with the way Ed masterfully steers the discussions and Ben's very clear articulation of his views and thesis, without hyperbole or jargon. I especially liked the way the interview ended about the banks and financials, being the "financial" in the financial crisis. And they are being priced at levels below the valuations of 2009 - and this strangely is not being shouted about in the media. If all is so well with the world, why are banks priced so poorly? Ben is right that the banks are not going to go away - but I think the current valuations are a sign that there is going to be significant disruption to what they are today before this is all over. They won't be allowed to fail as we have seen for the past 10 years, central banks will see to that. But they won't be in the form they are today before this is all over. However long it takes.
  • TC
    Timothy C.
    29 September 2020 @ 14:51
    Great conversation. Love the commentary on the 60/40 portfolio which is going to be a challenge going forward. On Apple: While I agree Apple will get regulatory scrutiny, the reality is they have only 20% of the mobile phone market, whereas Android has a much more dominant position. The dust up really seems to be about the 30% rake on the App Store, which seems unreasonable on the surface, but in reality, it's not an unreasonable a rake. Apple pours $$ into the App Store ecosystem to make apps easy to develop and safe for users - changing that model is basically app developers shooting themselves in the foot...
  • NI
    Nate I.
    28 September 2020 @ 03:48
    I don't know how Ben can say investors haven't lost money on Elon's lies. Both longs and shorts took a blood bath on Elon's $420 lie. That's just the tip of the iceberg.
    • MW
      Max W. | Real Vision
      28 September 2020 @ 20:40
      I think he is talking about things they have “gotten away with” like selling FSD and recently having to roll back some of the language. Timelines that they obviously can’t hit being shrugged off as optimism. Dan McMurtrie said the type of pie in the sky optimism that has been commonplace in biotech for years has now found its way in to the rest of the market. Every new pre revenue idea, product, or company is being sold as a potential “cure for cancer”.
  • DB
    David B.
    26 September 2020 @ 00:21
    Ed, next up Montier?
    • EH
      Edward H. | Real Vision
      26 September 2020 @ 13:25
      Definitely. I would actually like to see his former colleague Dylan Grice do the interview. But I do want to get James (and his other colleague Albert Edwards) on RV.
  • JJ
    John J.
    25 September 2020 @ 16:37
    Fabulous conversation and great interview. Lots of common sense advice.
  • SS
    Simeon S.
    24 September 2020 @ 18:39
    EM value = energy and mining?
    • AD
      Antonio D.
      24 September 2020 @ 21:19
      I read that a "Emerging Markets"
    • HJ
      Henry J.
      24 September 2020 @ 21:22
      Emerging markets
    • LC
      Luis C.
      24 September 2020 @ 21:50
      Emerging Markets
    • JL
      John L.
      25 September 2020 @ 15:41
      Though energy and mining can be construed as EM value
  • RM
    Robert M.
    25 September 2020 @ 03:40
    Excellent interview. Love the comments on banks...personally looking at BAC, JPM, and C. Also appreciate his remarks on missing the past run-ups. Lots of old school investors, including myself, are wrestling with the valuations of growth stocks though most of us would like to own some of them. Can the Fed never allow the market to crash for more than a month? The buy the bounce mentality has us value guys wondering if the chicks will ever come home to roost someday with a true bear market.
  • WS
    William S.
    25 September 2020 @ 01:44
    Great interview - valuable info...encore plz.
  • RL
    Ruby L.
    25 September 2020 @ 01:40
    Great interview and very insightful with practical ideas
  • BA
    Bruce A.
    25 September 2020 @ 00:52
    Great job Ed. Again and again you work around a subject from different angles adding to a bigger understanding of the whole.
  • TW
    Tom W.
    24 September 2020 @ 22:59
    Great interview, Ed. I loved how you placed Tesla on the tee for Ben. (Tho guessing your portfolio shares of Tesla are something less than 1). Calling Tesla share owners the opposite of smart elicited, as of this writing, 6 thumbs down and 115 thumbs up and some challenges in the comments. Back to Ed's great interview and Ben... Good job--both of you.. No.... Great job
  • OA
    Olivier A.
    24 September 2020 @ 22:20
    Truly great interview.
  • jG
    james G.
    24 September 2020 @ 22:14
    The differing lenses through which your guests view the world forces you to think. There were bits I agreed with and bits I did not. ---- but it is through my subscription to Real Vision that I actually have a foundation on which to base my current view of the world. So, more please ...
  • LB
    Lorenzo B.
    24 September 2020 @ 21:44
    A-mazing, amazing content! Thumbs up!
  • OC
    O C.
    24 September 2020 @ 20:45
    I think that this is a great interview. That chart on 7-year forecast is quite eye opening even if it is a forecast.
  • CR
    Chris R.
    24 September 2020 @ 20:38
    Oh, Oh - "Its different this time' - look at around 46 minutes left
  • CB
    Clifford B.
    24 September 2020 @ 16:18
    Great Interview!
  • RM
    Roberto M.
    24 September 2020 @ 15:48
    Great interview, the quality of interviewer and guest is 10/10.
    • RM
      Roberto M.
      24 September 2020 @ 15:48
      Golden age of RV!
  • PU
    Peter U.
    24 September 2020 @ 15:20
    Really really good interview! Bravo
  • DF
    Dominic F.
    24 September 2020 @ 11:43
    Very amusing "UK unwilling to negotiate".