The most concerning "this time is different" is the fall of the US as an empire. Not sure if you're familiar with Ray Dalio's Changing World Order Hypothesis (great YouTube video laying it out - https://www.youtube.com/watch?v=xguam0TKMw8&t=1s)
I like to think that we can escape things like this. When we see these cycles playing out as they did in front of our eyes before, it's almost as if part of this universe is continuing forward on a deterministic basis that we cannot control.
I like to think that we can change course, but again there is big danger in saying: "This time is different"
Another one is the AI hype cycle. I fear to say that this time is different, because typically technology cycles tend to far overshoot, there's a correction, and then it steadily builds for years; however, it's possible AI hype is UNDERSTATED in this moment...
I think the AI hype train is 100% the same as the dot com bubble. Over enough time, the valuations were ultimately well justified, but they were about 10 years too early, so naturally there was a nasty correction. Same will be true here, and those long-term rewards will flow forever forward, just like the internet... but company valuations will get even crazier than they are today, I think. We're at the beginning of a bubble forming, not the end, IMO.
I am very familiar with Dalio and his work. I like the framework, although I don't always agree with his conclusions. It's very useful.
My theory is that the mantra "But this time it’s different" rely on our physical perception and memory’s flaws.
By that time we all lived multiple bubbles. When we are in the middle of one, our everyday life turns around it. We inhabit a world of sensations and news. Even if we lived another semblable bubble before, the memory of it dulled what we felt back then. We look at it in retrospect as we would a story in the news.
When we say "this time it’s different" it is simply because we feel the thing as if experiencing it for the first time. It must be different then.
For me it’s akin to falling in love again. You rediscover it as if it was the first time. And you say to your friend "yes I said I would not do it again, but this time: it’s different."
@Andrew Smith The scariest one for me right now is about democracy, specifically ours here in the US. History tells us empires fall, but we think "not us." We see photos of women in other countries a mere 50 years ago compared to now, going from freedom and opportunity to Sharia law and think "It can't happen here." "This time it's different" is comforting ... but dangerous ... thinking.
Yep, spot-on. The price of democracy is eternal vigilance, and it's the toughest government to live in, at least in terms of how much is required of a citizen. The trade-off is that we get to have freedom. We need to keep that in mind.
Your article really hit home for me – it's so easy to fall into the trap of thinking "this time, it's different," whether we're talking about investing, world events, or just life in general. You made a strong case for how history keeps repeating itself, even when we least expect it. It's a hard question you asked about whether we can break out of these cycles, but I believe if we learn from the past and stay aware, we can at least smooth out the ride a bit!
The most concerning "this time is different" is the fall of the US as an empire. Not sure if you're familiar with Ray Dalio's Changing World Order Hypothesis (great YouTube video laying it out - https://www.youtube.com/watch?v=xguam0TKMw8&t=1s)
I like to think that we can escape things like this. When we see these cycles playing out as they did in front of our eyes before, it's almost as if part of this universe is continuing forward on a deterministic basis that we cannot control.
I like to think that we can change course, but again there is big danger in saying: "This time is different"
Another one is the AI hype cycle. I fear to say that this time is different, because typically technology cycles tend to far overshoot, there's a correction, and then it steadily builds for years; however, it's possible AI hype is UNDERSTATED in this moment...
I think the AI hype train is 100% the same as the dot com bubble. Over enough time, the valuations were ultimately well justified, but they were about 10 years too early, so naturally there was a nasty correction. Same will be true here, and those long-term rewards will flow forever forward, just like the internet... but company valuations will get even crazier than they are today, I think. We're at the beginning of a bubble forming, not the end, IMO.
I am very familiar with Dalio and his work. I like the framework, although I don't always agree with his conclusions. It's very useful.
My theory is that the mantra "But this time it’s different" rely on our physical perception and memory’s flaws.
By that time we all lived multiple bubbles. When we are in the middle of one, our everyday life turns around it. We inhabit a world of sensations and news. Even if we lived another semblable bubble before, the memory of it dulled what we felt back then. We look at it in retrospect as we would a story in the news.
When we say "this time it’s different" it is simply because we feel the thing as if experiencing it for the first time. It must be different then.
For me it’s akin to falling in love again. You rediscover it as if it was the first time. And you say to your friend "yes I said I would not do it again, but this time: it’s different."
Romantic relationships is a great category to bring into this discussion!
@Andrew Smith The scariest one for me right now is about democracy, specifically ours here in the US. History tells us empires fall, but we think "not us." We see photos of women in other countries a mere 50 years ago compared to now, going from freedom and opportunity to Sharia law and think "It can't happen here." "This time it's different" is comforting ... but dangerous ... thinking.
Yep, spot-on. The price of democracy is eternal vigilance, and it's the toughest government to live in, at least in terms of how much is required of a citizen. The trade-off is that we get to have freedom. We need to keep that in mind.
Your article really hit home for me – it's so easy to fall into the trap of thinking "this time, it's different," whether we're talking about investing, world events, or just life in general. You made a strong case for how history keeps repeating itself, even when we least expect it. It's a hard question you asked about whether we can break out of these cycles, but I believe if we learn from the past and stay aware, we can at least smooth out the ride a bit!
Thanks so much, Zheng!