Quality as a factor—measured by less debt, higher returns, more stability, and lower bankruptcy risk—is a genuine market inefficiency: quality stocks outperformed by roughly 0.5% per year while bonds show AAA bonds underperform B bonds by ~1% per year, creating a ~1.5% annual 'freebie' inefficiency that academics missed for decades.
factualpending
Speaker
Jeremy GranthamEvidence Quote
“quality outperformed...the AAA stock...outperformed by about half a percent a year...a freebie return and an inefficiency of about 1 and 1/2% a year”
Source
Jeremy Grantham: Lessons from 60 Legendary Years of Investing— The Master Investor Podcast with Wilfred FrostCreated: 8/12/2026, 6:39:12 PM
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