Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 435

Are these the four most-costly words in investing?

Legendary investor John Templeton is credited with the first observation that believing ‘This Time Is Different’ will be costly in investing. In his 1933 book, 16 Rules for Investment Success, he wrote:

“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.”

It has become a timeless reference, with the warning commonly used by financial analysts who prefer to draw on the history of stockmarkets, economic cycles and long-term company valuation metrics. It’s a way of saying, “We’ve seen it all before” ... the manias, the over-pricing, the FOMO. The argument that circumstances are now unique is often rejected using a version of Winston Churchill’s phrase that:

"Those that fail to learn from history are doomed to repeat it.”

In which case, many of our respondents are in for a shock because a high percentage believe investing has fundamentally changed.

The Firstlinks Survey results

The Firstlinks audience is generally older and more experienced in investing than the readers of most newsletters, based on our past surveys. For example, three-quarters of our readers in over 2,000 responses reported they are over 55.

So it was expected that they would overwhelmingly vote ’No’, that this time is not different, as they have seen markets rise and fall in many economic cycles, and the current high valuations and record stockmarket levels are yet another top in a long history of market over-reactions.

Yet almost 40% believe This Time Is Different, and with over 7% in the ‘Don’t Know’ camp, that leaves slightly over half falling back to a more traditional view on market ups and downs.

Q. Do you think investing has fundamentally changed in the last 5-10 years?

We have compiled many of the hundreds of comments into the attached report as they are too long to publish in an article, but here are selected highlights from both sides. And for those who are bemused, take comfort from this reality check:

“I’m a veteran of 30 years in the industry and I’m paralysed. I’ve got no idea any more.”

Yes, this time is different

*Definitely. Young investors are thinking: ethical, sustainable, climate crisis. What's the point in having a pack of money in the future when the world is caving in due to our warming climate.

*Everyone now has access to the same information, almost as soon as it’s available. So no one has an “edge” in the market, it’s completely democratised.

*On-line brokers have made it so much easier to invest and to follow your investments. Also, one can "invest" in quality on-line commentary like Eureka Report and Firstlinks.

*Three reasons. A. Interest rates effectively zero. B. Central banks creating wealth from thin air, printing money. C. Simple and straight forward access to investments, historically people either didn’t know how to invest or were put off by the ‘suits’.

*The massive reach and world wide scalability of the big tech companies is something quite different in the last 20 years.

*Exponential technology has made it easier for businesses to grow quicker.

*yes things have changed. Everyone is an investor. The money has to go somewhere. But valuations are made on profits. The pigeons will come home to roost and many people will be affected. But its hard to stay out while the party is still going.

*Tech expansion provides a level of scalability at margins unseen in previous generations. In the ‘olden days’ you could basically only sell one copy of what you made (eg a car, a barrel of oil) and rely on capital intensive distribution channels (eg ships/trucks/dealers, oil rigs/tankers/petrol stations) and analogue marketing (eg TV, newspapers, magazines) to sell the one unit. Now you can build various levels of technology/apps in your garage, advertise it free of charge to multiple social media channels that can generate high volumes of highly targeted views and create sales/ subscriptions with limited costs. Build one app, but sell it 50 million times over. This type of business model transformation clearly does not apply to every sector, however the hyper inflated PE of many tech stocks is seemingly lifting the assessment of worth of some ‘traditional’ companies. A current 25 - 35 year does not know any different from the world they have grown up in. This is all normal. Crypto, FAANG, Elon, Melanie Perkins etc - what is their to be scared of? …… So, I’d suggest it is ‘different’ but that doesn’t make it wrong. Understanding the difference is the key.

*I believe that, as a wise American observed, that the media has become the message, thanks to influencers and an emerging preference for a less rigorous examination, if at all, of fundamentals. A glitzy presentation, not on Powerpoint, wins over the gullible. Hard facts are too hard and inconvenient truths.

No, this time is not different

*Humans haven't changed. We are (on average) still greedy, biased, over confident and love to follow the crowd. Until human kind changes, nothing else will. We are in a bubble, and the more retail investors who start trading like we have see during covid, the bigger the pop will be. The question is who long will it take to recover when it does pop. Will people be scared off, or will the craze of 'stocks only go up' flood more people in to buy cheap.

*It is undeniable that markets go through cycles - periodic bouts of extreme irrationality, be it be pessimism or optimism. They spend the time in between these two extremes fluctuating in a band that we might for want of a better term call "fair value". Of course, innumerable factors exert their influence throughout these cycles and act to either exacerbate or moderate these cycles, but one should not confuse cause with effect. The cycle will always exist; the factors that amplify its effects will come and go according to fad and fashion.

*When central banks print unlimited amounts of money and drop interest rates to zero, the discount rate on future earnings also approach zero and valuations of everything go through the roof. We are in for an all mighty crash when central banks reverse their policies.

*I have been investing (and a financial adviser) for 20 years - same old - biggest bubble i've seen though (other than US real estate in 2007)

*Bubbles burst, and huge bubbles burst more catastrophically. I've been a professional investor since 1986 and the simple reality is always true - an asset only provides long term worth if it can throw off cash and you did not pay too much for the free cashflow.

*The twelve most dangerous words in investing are: "The four most dangerous words in investing are, it's different this time."

*Every cyclical episode is, in fact, different in some respect. But the key drivers - especially behavioural factors such as fear, greed, over-confidence and certain cognitive baises -remain essentially unchanged.

*I have heard the comment “This time it is different” multiple times in my 40 years of investing only to find out it wasn’t. Fundamentals always matter.

* In every boom we hear the note: This time it is different. It is only different until things fall apart. When the interest rates are finally start rising and maybe even rising quickly to catch up with inflation, we might see that this time is no different. Surely Tesla and others that are extremely overvalued will be crumbling at some stage. It can't go on forever.

 

 

 

 

  •   24 November 2021
  • 3
  •      
  •   

RELATED ARTICLES

Shaky markets, steady mind

Winning by not losing: The silver rule of investing

Improving financial literacy for women is a necessity

banner

Most viewed in recent weeks

How cutting the CGT discount could help rebalance housing market

A more rational taxation system that supports home ownership but discourages asset speculation could provide greater financial support to first home buyers.

Is there a better way to reform the CGT discount?

The capital gains tax discount is under review, but debate should go beyond its size. Its original purpose, design flaws and distortions suggest Australia could adopt a better, more targeted approach.

Want your loved ones to inherit your super? You can’t afford to skip this one step

One in five Australians die before retirement and most have not set up their super properly so their loved ones can benefit from all their hard work and savings. 

Welcome to Firstlinks Edition 648 with weekend update

This is my last edition as Editor of Firstlinks. I’m moving onto a new role though the newsletter will remain in good hands until my permanent replacement is found.

  • 5 February 2026

Super is catching up, but ageing is a triple-threat

An ageing Australia is shifting the superannuation system’s focus from accumulation to the lifecycle of retirement. While these pressures have been anticipated for decades, they are now converging at scale and driving widespread industry change.

Meg on SMSFs: Last word on Div 296 for a while

The best way to deal with the incoming Division 296 tax on superannuation is likely doing nothing. Earnings will be taxed regardless of where the money sits, so here are some important considerations.

Latest Updates

Taxation

3 ways to defuse intergenerational anger

With the upcoming budget increasingly likely to include bold proposals to alter the tax code I’ve outlined three incremental steps with fewer unintended consequences.

Economy

Why an extended US-Iran war will punish mortgage holders

The impact of the Iran War is far more than expensive petrol. Higher oil prices have secondary inflationary impacts that reverberate throughout the economy which could be bad news for Australians with mortgages.

Infrastructure

Don’t forget the yield

Global Listed Infrastructure dividends are forecast to grow 5-6% p.a over the next two years. After a hiatus, share buybacks are back on the agenda and will play an integral role in shareholder returns.

Iran war hands politicians free ticket to blame oil prices for inflation

Past oil shocks offer lessons for investors dealing with the fallout from the Iran War and the ongoing impact on inflation.

Economy

Japan 2026: A new PM heralds a new golden age?

Former Australian Prime Minister, Paul Keating, once said "When you change the government, you change the country." We're about to see whether that holds true in Japan.

Investment strategies

Why are central banks moving from US Treasuries to gold?

Central banks now hold more gold reserves than US Treasuries, signalling a shift in safe-haven asset strategy and portfolio diversification as geopolitical risks increase.

Strategy

Has global human wellbeing peaked? What the data reveals

Historically economic progress is measured by GDP growth but there is an increasing body of work that explores quantitative measures of wellbeing.

Sponsors

Alliances

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.