This time really is different

The phrase 'this time it's different' has become investment shorthand for dangerous delusion. We investors use it mockingly when spotting bubbles or ridiculous fads – those moments when promoters insist their particular scheme has transcended ordinary economic laws. The tulip bulb that cannot fall, the technology stock that need not show profits, the cryptocurrency that will replace all currencies – each generation produces its version of suspended disbelief. I remember how, right at the start of my investing life, everyone seemed to earnestly believe in Harshad Mehta’s ‘replacement cost’ theory. What a joke that appears to be now. And yet, there's an uncomfortable irony in our smugness about this phrase. By dismissing any claim that circumstances have fundamentally shifted, we risk falling into an opposite trap: we assume that nothing ever truly changes. We've become so accustomed to ridiculing bubble optimists that we've forgotten that legitimately transformative moments do occur. Sometimes, this time genuinely is different. Suggested read: Mastering market cycles with Howard Marks Think of the remarkable period w