CAPE ratio

Weekly Update

This Time IS Different

Published June 30, 2017

timingcube_cartoon063017We found this recent post from Ben Carlson to be of interest:

Sir John Templeton wrote “16 Rules for Investment Success” in 1993. The following is by far the most quoted passage:

The investor who says, ‘This time is different,’ when in fact it’s virtually a repeat of an earlier situation, has uttered among the four most costly words in the annals of investing.

“This time is different” is something of a sacrilegious phrase in the investment industry. Every time markets, corporate fundamentals or long-followed economic ratios enter above-average territory there are sure to be pundits or investors warning about complacency and imminent mean reversion. Anyone who claims it’s different this time is mocked with disdain for daring to question long-term financial relationships. (more…)