Several years ago, I was regularly on a Fox News panel with one of the most successful investor/speculators of all time, a true genius named Jim Rogers. Jim and I were debating about some facet of the stock market and I said something I do not entirely recall. It was roughly about how even though the Fed was printing so much money, this time it would not create inflation, even though it generally does.
Jim called me on it immediately.
“There you go,” he said. “You’ve just said the most dangerous words in the investors’ dictionary: ‘It’s different this time.’”
Jim is a billionaire many times over, I am sure, and he learned his trade at the school of the redoubtable investor George Soros. Messrs. Soros and Rogers have learned that there are certain recurring themes in investing, and that once you deviate too far from these norms, you are going to get in real trouble. George Soros reportedly made a billion dollars personally, back when that was a lot of money, by selling short the British pound. When the pound was in fact allowed to float radically downward, he reaped the rewards, and he’s now free to be a patron to the political causes he endorses. Jim’s picks in commodities have proved to be startlingly on target, as he relentlessly applies common sense and arithmetic when the rest of us apply hope and fear.
His point on that panel was brilliant. If you believe that “this time it’s different,” that this ...