Tuesday, March 26, 2013

Spotting investment trends

Jim Rogers on the topic of spotting investment trends:

I don’t know, but I do know that if something’s too good to be true then it’s probably not true. The idea that we could all buy five or six houses with no job and no money down, and then that those mortgages could be sliced and diced and made into even more miraculous AAA credit.

Looking back, even at the time it was incomprehensible to me that people would believe that. But looking back on it, I don’t think anybody could comprehend how that happened, but it did. You often see that.

Back in the late 90s there was the whole dot com thing. Everybody was talking about a new era. Even the Wall Street Journal started to capitalize New Economy, you know, everybody got sucked in. But if you have any knowledge of history, you know this can happen throughout history. All bubbles look the same, all absurd policies look the same, and they all lined up. And people always say the same things, they say it’s different this time, they say it’s a new economy, a new era, whatever, and it never is. All these absurdities always end up badly. And by the way, the Wall Street Journal stopped capitalizing New Economy in the early part of this century, because even they came to realize, oh my gosh, it was not a new economy, and it never is a new era. Mankind doesn’t change very much at all.

Jim Rogers

Warren Buffett

Nouriel Roubini