Edited by Julia Hanna; photo by Webb Chappell

When I was 16, I took my savings to the bank and bought some shares of a neighbor’s scaffolding company. Before coming to HBS, I sold them to my mother, who had also acquired some, and we felt pleased about saving the commission.

A few years later, the company went bankrupt. I wrote up that experience as an investing principle for a quarterly newsletter: It’s always good to have a mother to buy your bad stocks.

After business school, I went into management consulting, which is quite a boring activity. I asked myself a simple question: Who among my friends was having the most fun? The answer by a wide margin was the people in the stock market.

They were playing in a mini-bubble of microcap stocks and getting out before it exploded. I played, too. It was very exciting. Then it blew up faster than we could count on, and I lost everything. After that I became a staunch, careful value investor.

I’ve always had the tendency to go for the 60,000-foot view. If you do that, you realize that the great bubbles of history have been massive and obvious. But while their breaking is certain, the timing is absolutely not. Being early can cost your career, which is more than most can stand.

In other words, you can’t know how much money you might make before the bubble bursts. That is so commercially painful that the big investment firms are almost never bearish…except for now, which is very unusual.

Looking ahead, our flashpoints are climate change, geopolitics, declining fertility rates, bad agricultural practices, high levels of debt, shortages of labor and raw materials, and more. You can’t predict the stress point, but the fact that something will crack is not unpredictable. That is nearly certain.

My downtime, other than walking in the woods, is spent reading, Trying to keep up with what the hell is going on, then brainstorming with my colleagues as to what it all means.

I don’t think it’s likely that we will come through with a stable global civilization. But we might. We have a decent chance of making it if we’re even more ingenious in inventing green alternatives. We may hate to do long-term stuff to protect our grandchildren, but at least we’re inventive.

Jeremy Grantham is Cofounder and chairman of GMO, and Founder of Grantham Foundation for the Protection of the Environment.

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