Synopses & Reviews
Why do so many investors make the same mistakes repeatedly—being too bullish or too bearish at just the wrong times? Because they forget. Forgetting pain is an instinct—humans have evolved that way to better cope with the problems of survival. But for the complex and often counterintuitive world of investing, it causes serious errors.
"This time it's different" are the four most expensive words in the English language (according to investing legend Sir John Templeton). Yet many investors routinely fall into the trap of thinking "now" (whenever "now" is) is different somehow. In Markets Never Forget (But People Do): How Your Memory Is Costing You Money—and Why This Time Isn't Different, four-time New York Times bestselling author Ken Fisher shows readers how their memories play (often costly) tricks on them—and how they can combat their faulty memories with just a bit of history.
This isn't to say history repeats itself perfectly. It doesn't—but a recession is a recession. Some are vastly worse than others—but investors have lived through them before. Credit crises aren't new, nor are bear markets—or bull markets. Geopolitical tension is as old as mankind, as is war and even terrorist attacks. Understanding how investors have reacted to similar past events can help guide investors in shaping better forward-looking expectations. The past never predicts the future, but it can reduce guesswork about what's ahead.
In this book, Fisher takes aim at some major market memory mishaps—like the idea stocks have become inherently more volatile or that wildly above- or below-average returns are abnormal. He shows how, early in every recovery, investors don't believe in it—often at a huge cost. And he shows how, in investing, ideology is deadly. Most important, he teaches how you can use history as one powerful tool to help begin reducing your error rate and help begin getting better investing results.
Synopsis
There was the devastating Crash of 1929 that was the beginning of the 12-year Great Depression. And then came the crash of 1987 when the market declined 508.32 points (22.6%) or $500 billion in one day: the largest one-day percentage drop in history. In 2011, the dot-com bubble burst to near-devastating effects, leading to a mild economic recession in the early 2000s.
Investors, fueled by the outside noise of media and panic, seem to forget that we've experienced big highs and steep lows before. With the Great Recession technically over following the 2008 market crash, investors are bracing themselves for what many refer to as the "New Normal," an investment period unlike any before with massive long-term unemployment, weakened labor unions, falling home prices, and a stagnant economy.
Ken Fisher argues that there's nothing "new" about the current economic period, especially when you look back at history and find that there is always a resurgence in market activity following a recession with protection and profits being made in infrastructure sectors, healthcare, hard metals, and more. Ken does all the work for investors, identifying similarities and trends from past booms and busts and the uncertain economies that follow, to guide investors through the next few years.
Synopsis
History repeats itself, a reminder and mantra for post-Great Recession investorsMarkets Never Forget (But People Do) sets out to correct a major misconception: that the new investment era in which the market now finds itself is unlike anything we've ever seen before. Bestselling author Ken Fisher revisits the past to prove that history is simply repeating itself, that what is to come is no different to what has come before it. There's nothing "new" about the current economic period, as history has proved that there is always a resurgence in market activity following a recession. With the help of this book, smart investors can spot the trends and patterns that will enable them to thrive in the months and years to come.
- With the Great Recession technically over, investors are bracing themselves for the "New Normal," an investment period unlike any before with massive long-term unemployment and a stagnant economy, but this is not borne out by market history
- Pundits and media analysts have generated a mass hysteria about the so-called "new" investment era following the 2008 market crash, but the old rules still do apply
- A walk through the past shows that history does, indeed, repeat itself and that we can find patterns (and refuge) in historical cycles to see how best to prepare for the future
- Co-written by Ken Fisher, CEO of Fisher Investments, which has one of the largest client outreach programs in the country
- Every one of the Fisher's previous books have ranked on the Wall Street Journal and New York Times bestseller lists
In this exciting new book, Fisher does the legwork for investors everywhere, identifying similarities and trends from past booms/bust cycles in order to guide them safely through to the other side.
Synopsis
Sir John Templeton, legendary investor, was famous for saying, "The four most dangerous words in investing are, 'This time it's different.'" He knew that though history doesn't repeat, not exactly, history is an excellent guide for investors.
In Markets Never Forget But People Do: How Your Memory Is Costing You Money and Why This Time Isn't Different, long-time Forbes columnist, CEO of Fisher Investments, and 4-time New York Times bestselling author Ken Fisher shows how and why investors' memories fail them—and how costly that can be. More important, he shows steps investors can take to begin reducing errors they repeatedly make. The past is never indicative of the future, but history can be one powerful guide in shaping forward looking expectations. Readers can learn how to see the world more clearly—and learn to make fewer errors—by understanding just a bit of investing past.
Synopsis
Think "this time it's different"? Think again.From internationally recognized investment expert Ken Fisher comes Markets Never Forget (But People Do), a well-reasoned, logical, data-driven and often entertaining look at the many ways investors' memories fail them. What's more, Fisher provides tools investors can use to begin improving their faulty memories—now.
No matter how big, new and scary something may seem, according to Fisher we've almost always been through something similar before. And if you can remember that, find those other times and learn lessons from them, you can know better how to react—or not react. You can know that it's never as bad, as great or as lasting as your faulty memory makes you think. Just remembering that can make you a better investor. Don't forget. Markets don't.
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About the Author
Ken Fisher is best known for his prestigious "Portfolio Strategy" column in Forbes magazine, where his over 27-year tenure of high-profile calls makes him the fourth longest-running columnist in Forbes's 90-plus year history. He is the founder, Chairman and CEO of Fisher Investments, an independent global money management firm managing tens of billions for individuals and institutions globally. Fisher is ranked #252 on the 2010 Forbes 400 list of richest Americans, and #736 on the 2011 Forbes global billionaires list. In 2010, Investment Advisor magazine named him among the 30 most influential individuals of the last three decades. Fisher has authored numerous professional and scholarly articles, including the award-winning "Cognitive Biases in Market Forecasting." He has also published seven previous books, including
New York Times and
Wall Street Journal bestsellers,
The Only Three Questions That Count,
The Ten Roads to Riches,
How to Smell a Rat and
Debunkery, all published by Wiley. Fisher has been published, interviewed and/or written about in many major American, British and German finance or business periodicals. He has a weekly column in
Focus Money, Germany's leading weekly finance and business magazine.
Lara Hoffmans is a content manager at Fisher Investments, managing editor of MarketMinder.com, a regular contributor to Forbes.com and co-author of the bestsellers, The Only Three Questions That Count, The Ten Roads to Riches, How to Smell a Rat and Debunkery.
Table of Contents
Preface ixAcknowledgments xvii
Chapter 1 The Plain-Old Normal 1
Yes Sir, Sir John 1
The Normal Normal 5
The Jobless Recovery 14
The Always Feared, Rarely Seen Double Dip 23
Chapter 2 Fooled by Averages 31
Bull Markets Are Inherently Above Average 32
Viva the V 36
Normal Returns Are Extreme, Not Average 47
The Pause That Refreshes (and Confuses) 49
Getting Average Returns Is Hard—Really Hard 53
Chapter 3 Volatility Is Normal—and Volatile 57
What the Heck Is Volatility? 58
Volatility Is Volatile 61
The Daily Grind 65
Stocks Are Less Volatile Than Bonds? 67
Economic Volatility—Also Normal 69
Volatility Isn’t Inherently Bad 71
Never a Dull Moment 74
Chapter 4 Secular Bear? (Secular) Bull! 81
Seeing the World Through Bear- Colored Glasses 82
Two Secular Bear Markets? 84
Stocks—Up Vastly More Than Down 90
Chapter 5 Debt and Deficient Thinking 101
Deficits Aren’t Bad, but Surpluses Will Kill You 105
The History of Big Government Debt 110
Just Who Is at Default Here? 116
Chapter 6 Long- Term Love and Other Investing Errors 123
No One Category Is Best for All Time 124
Long- Term Love Is Like Long- Term Forecasting—Both Wrong 129
It’s Still Heat Chasing Even When It Seems Safe 134
Use History to Your Advantage 146
Chapter 7 Poli-Ticking 151
Enter the Ideology- Free Zone 152
Your Party Isn’t Better 153
Presidents and Risk Aversion 155
Perverse Inverse—It’s Four and One 160
Poli- Tics Go Global 170
Poli- Tics Versus Entrepreneurs 172
Chapter 8 It’s (Always Been) a Global World, After All 177
It’s Always Been a Small World 179
Seeing the World Right 186
Conclusion 194
Appendix 197
Notes 201
Index 211