“This Time, It’s Different.” (< 1 minute read)
Those are the four most dangerous words in investing, according to Sir John Templeton.
He could have meant a few different things by that. Possibly, referring to the human tendency to think we won’t make the same mistake twice. Or thinking the stock market will behave differently than it has in similar conditions in the past. Or arguing that history will not repeat. A belief that current exceptional market conditions are justified by special circumstances (think tech stocks in the 1980s, or housing and subprime mortgages in the early 2000s) often can cause investors to want to overlook historical patterns.
Some put a slight twist on Sir John Templeton’s adage and say the four words “this time, it’s different” are the most expensive words in the English language.
The point is, if your investing strategy and your portfolio are well researched and solid, you’ll be able to stay the course even when new inventions cause bubbles (that eventually burst) and when recessions come and hopefully go.
Sir John Templeton (1912 -2008) was a legendary 20th century investor and mutual fund manager and a groundbreaking philanthropist.