It's Not Different This Time

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White Coat Investor
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It's Not Different This Time

Post by White Coat Investor » Sun Mar 22, 2020 9:53 am

A lot of newer forum participants have been surprised to see so many supposed Bogleheads panicking, selling low, market timing, picking individual stocks etc. They are surprised because they thought Bogleheads didn't do this stuff. Indeed, their mentor, Jack Bogle, said
I've said "Stay the course" a thousand times, and I meant it every time.
He meant it this time too, even if he isn't around to say it. Some of them are wondering if this mass Boglehead panic happened in 2008 too. While I'm nowhere near the oldest or most experienced Boglehead, I just wanted to reassure these newer members that yes, this happened in 2008 as well. There were lots of people who professed to be Bogleheads but didn't stay the course in 2008. Here are some examples. Feel free to add your own to the list.

viewtopic.php?t=33253

viewtopic.php?t=32624

viewtopic.php?t=32623

viewtopic.php?t=5934

viewtopic.php?t=25126

viewtopic.php?t=33849

Stay the course. We don't know how deep this bear will go. We don't know when it will end. But we do know two things:

# 1 It will end.
# 2 Those who continue to follow their reasonable written plan will be glad they did so on the other side of it while those who panicked and sold low will regret their actions.

Good luck investing. Stay healthy.

Edit: Maybe I'll start compiling threads here from this bear market too. Here's one:

viewtopic.php?p=5123733#p5123733
Last edited by White Coat Investor on Sun Mar 22, 2020 10:38 pm, edited 2 times in total.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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nedsaid
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Re: It's Not Different This Time

Post by nedsaid » Sun Mar 22, 2020 10:56 am

I have done nothing. The news and the markets have been so crazy that I wouldn't draw any conclusions about the longer term behavior of asset classes based upon the last month. Not sure lessons can be drawn from the last month regarding market behavior because each bear market has its unique causes, no two are exactly the same. It is like the markets have just lost their minds and we are in a period of temporary insanity. We just have to wait until rationality returns. If you had a well constructed portfolio before all of this hit, just wait it out. Selling your stocks at or near the bottom could doom your future retirement. The thing is, we are seeing crazy things happen not only in the stock market but also in the bond market. The market can panic in ways that you never dreamed.

Also amazed at all the doom and gloom here. I visited Poland in 2016 and if you are a student of history, you realize that the Polish people had the misfortune of being located between the Germans and the Russians. They were also not too far away from the Hapsburg empire. Another thing you have to realize is that a huge stretch of Northern Europe is pretty flat, all the way from Moscow, Russia to Northern France. Really no geographic barriers save for rivers to stop armies from rolling back and forth. Poland even had a period during which it didn't even exist as a country.

Learning more about World War II and post war history from my trip, I learned that Poland lost 20% of its population during the war. Their capital, Warsaw was 86% destroyed during the war and just abandoning the site was considered but the Poles decided to rebuild. Auschwitz is in Poland. Poland had a large Jewish population pre-war and this influence was a huge part of their culture. The Jewish population there was almost entirely destroyed. Then after the Nazis were driven out, the Soviets occupied Poland for another 45 years or so after that. So the Poles faced about 50 years of oppression from outside powers.

Now on to American Economic history. Particularly in the pre-Federal Reserve Bank days, our economic history is full of economic and market panics. From boom to depression and back to boom again. To become our own nation, we fought a Revolutionary War and then sort of had to do much of it all over again in the War of 1812. But the economy bounced back from various crisis and sometimes pretty quickly. We have pretty much convinced ourselves that a Coronavirus quarantine for maybe a few months will damage our economy beyond repair and produce and endless recession. When I look at the broad sweep of history and then look at US economic history, we sort of sound like a bunch of babies today. We are not occupied by foreign armies, no one is bombing our cities from the air, and we are not subject to artillery bombardment. Our problems seem pretty small in comparison.

I am not making light of the current situation with the Coronavirus. We do have a big problem, we are trying to save a good part of our elderly population and many of those with chronic health problems. We should heed what Medical professionals are telling us. The point is, we will get through this. This will end at some point. When the markets see clarity regarding this issue, the markets will recover.
A fool and his money are good for business.

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cashboy
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Re: It's Not Different This Time

Post by cashboy » Sun Mar 22, 2020 11:20 am

White Coat Investor wrote:
Sun Mar 22, 2020 9:53 am

Stay the course. We don't know how deep this bear will go. We don't know when it will end. But we do know two things:

# 1 It will end.
# 2 Those who continue to follow their reasonable written plan will be glad they did so on the other side of it while those who panicked and sold low will regret their actions.

Good luck investing. Stay healthy.
:thumbsup
Three-Fund Portfolio: FSPSX - FXAIX - FXNAX (with slight tilt of CDs - CASH - Canned Beans - Rice - Bottled Water)

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jeffyscott
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Re: It's Not Different This Time

Post by jeffyscott » Sun Mar 22, 2020 11:26 am

Nice list of the greatest hits of the last collapse, but I think this one belongs at the top of the charts:

viewtopic.php?f=10&t=30085

While you are nearly certain to be correct, especially with the helicopters warming up and getting ready to be loaded up with money, we don't actually know that your #1 and #2 are true. There is always some chance of a permanent loss that is never recovered.

Oh, BTW, your first two are the same discussion.
Time is your friend; impulse is your enemy. - John C. Bogle

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eye.surgeon
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Re: It's Not Different This Time

Post by eye.surgeon » Sun Mar 22, 2020 11:29 am

White Coat Investor wrote:
Sun Mar 22, 2020 9:53 am
A lot of newer forum participants have been surprised to see so many supposed Bogleheads panicking, selling low, market timing, picking individual stocks etc. They are surprised because they thought Bogleheads didn't do this stuff. Indeed, their mentor, Jack Bogle, said
I've said "Stay the course" a thousand times, and I meant it every time.
Thanks for the reassurance. There's a awful lot of this time it's different posts going on here.
"I would rather be certain of a good return than hopeful of a great one" | Warren Buffett

Elysium
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Re: It's Not Different This Time

Post by Elysium » Sun Mar 22, 2020 11:33 am

Having witnessed the panic of 2008, I can attest that this forum is not immune from it. I stayed mostly away from the forum those days, since the news was bad every day and I was busy working on initiatives that were directed at helping the recovery. I did rebalance a few times during that year, although I was early and was left without too much of bond money I could spare to rebalance when the bigger drops came, because in the event things got really nasty I needed the bond money to survive. So I kept that in a safe fund and continued buying equities through payroll deductions. I recall at one point down half of the value from the peak, but held on. It was easier since I was much younger and didn't have a lot of money.

This time is similar but I do have a lot more to lose and my asset allocation is only 10% more conservative from 2008. I am staying the course this time too, purchasing at 20% market drops this time, to try and avoid being too early and left without bond space like last time. I have some safe money in bonds that I would not exchange for equities like last time. Equity premium is earned over periods like this, it might get uglier before it gets better. Anyone feeling the barrage of panic posts are getting to them should consider taking a break from the forum, ignore their retirement assets for a while, and focus on what you can do to manage your personal situation better. Then come back and revisit things at year end.

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8foot7
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Re: It's Not Different This Time

Post by 8foot7 » Sun Mar 22, 2020 11:41 am

With respect, there is no way you can know at this point whether this time is different or not. I agree most of the time “this” time has not been different. There is always risk and a non-zero chance of loss. Perhaps a better title would be “most likely this time is not different.”

bigskyguy
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Re: It's Not Different This Time

Post by bigskyguy » Sun Mar 22, 2020 11:45 am

eye.surgeon wrote:
Sun Mar 22, 2020 11:29 am
White Coat Investor wrote:
Sun Mar 22, 2020 9:53 am
A lot of newer forum participants have been surprised to see so many supposed Bogleheads panicking, selling low, market timing, picking individual stocks etc. They are surprised because they thought Bogleheads didn't do this stuff. Indeed, their mentor, Jack Bogle, said
I've said "Stay the course" a thousand times, and I meant it every time.
Thanks for the reassurance. There's a awful lot of this time it's different posts going on here.
Allow me to respectfully disagree. In 100 years we have not seen a pandemic the likes of this. The complete absence of immunity in a world where we are so physically interconnected, with a virus that evidences characteristics of the one that caused the Spanish flu, with a national public health infrastructure that has been hollowed out over time, with a populist fervor that has at its core a defiance of the status quo rules of engagement, and with an economic infrastructure that penalizes this who hold reserves or show any proclivity of risk aversion, I think we are in the midst of a perfect storm. And I fear that staying the course is not only misguided but potentially catastrophic, not solely from a medical perspective, but also from an economic one.
Time will tell. Nassim Taleb May well have his moment.

plumberboy
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Re: It's Not Different This Time

Post by plumberboy » Sun Mar 22, 2020 11:54 am

I would respectfully have to disagree about it not being different this time. As far as I know since we became a nation we have never had such a closure of businesses, travel restrictions and personal stay at home restrictions as we have now. If for some reason all of this stays in place all summer or longer (I most certainly hope not) the economic damage that will be done will be unimaginable. To compare this with past market downturns and their recovery time is comparing apples to oranges.
Is there an extended deflationary period ahead? I don't know, but for me at age 77 capital preservation and money market accounts are the best for me even though I am also invested in stock index funds.
Last edited by plumberboy on Sun Mar 22, 2020 12:05 pm, edited 2 times in total.

ellink
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Re: It's Not Different This Time

Post by ellink » Sun Mar 22, 2020 11:59 am

Apologies for not crediting the original poster, but someone on this forum recommended this podcast: http://investorfieldguide.com/investingincrisis/

I found it very useful and interesting, especially when the interviewee spoke about "this time it's different". He said that all bull markets are the same -- having to do with access to cash, lots of new business starting up, easy money allows a shakeout of what works and what doesn't, etc.

But while all bull markets are the same, every bear market is different. There is a different inciting incident which truly makes it feel like "this time it's different" because it is. What isn't different is the recovery.

Food for thought. Stay safe, learned BHers.

Grt2bOutdoors
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Re: It's Not Different This Time

Post by Grt2bOutdoors » Sun Mar 22, 2020 12:05 pm

No, it's not different this time, I agree.

John Bogle said to stay the course and I am to the extent that I keep a healthy emergency fund, when most people advocated to invest that money. A Roth IRA is NOT an emergency fund, a stock or bond portfolio is NOT an emergency fund UNLESS you have so many assets that a 50%+ drawdown would not cause you to run out of money in the next 1-5 years. Not, 3 months, not 6 months, YEAR(s). Outside of this forum, not everyone has a secure job. This market scare ought to wake up folks to just how bad it could get out there. Go to certain regions of the country now, there is a HUGE wake-up call being delivered with very short notice.

I was there in 2008-2009 when the markets were freezing up, liquidity dried up and we did not know if the financial system would survive as we knew it to be then or today. I was there on 9/11 when buildings were falling down literally in front of me (not on the tv set). I always kept an emergency fund but after that experience I boosted it and yes, I lost out on the potential for gains, the one thing I did not lose out on was my sleep!!

The economy will come back, the markets will come back and IF anything is learned from the jarring and severe declines we've been seeing thus far, it's that a healthy emergency fund/reserve what ever you want to call it will allow you to STAY THE COURSE!!!
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

columbia
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Re: It's Not Different This Time

Post by columbia » Sun Mar 22, 2020 12:07 pm

What would “different” entail?
If you leave your head in the sand for too long, you might get run over by a Jeep.

Grt2bOutdoors
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Re: It's Not Different This Time

Post by Grt2bOutdoors » Sun Mar 22, 2020 12:10 pm

columbia wrote:
Sun Mar 22, 2020 12:07 pm
What would “different” entail?
Permanent destruction of capital.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Turkishcoffee
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Re: It's Not Different This Time

Post by Turkishcoffee » Sun Mar 22, 2020 12:16 pm

WW1 was never a “given” to win
WW2 was never a given to win
The Cuban missile crisis made the world feel like it was on the brink of utter destruction
20% interest rates in the 70’s
Terrorists flying into buildings in 2001
2008 massive capital crunch and bank failures

All were major problems, many of which the end was never a sure thing. These were INVOLUNTARY economic issues,

That is not to say this is not going to have a deep and painful impact, but we have intentionally shut down demand and supply. Some companies will recover, some will grow stronger from the competitive landscape and others will innovate and flourish. We are likely to be much better prepared for the next pandemic and vastly improve our sanitization of travel etc.

It’s different, but it’s not “different”.

jimkinny
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Re: It's Not Different This Time

Post by jimkinny » Sun Mar 22, 2020 12:21 pm

White Coat Investor
Thanks for the post
Much more importantly thanks for your work in the emergency department.

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cheese_breath
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Re: It's Not Different This Time

Post by cheese_breath » Sun Mar 22, 2020 12:22 pm

Different.. Not as many people jumping out of windows this time, because they can't.
The surest way to know the future is when it becomes the past.

Seasonal
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Re: It's Not Different This Time

Post by Seasonal » Sun Mar 22, 2020 12:22 pm

Every major bear market I can remember has been associated with a recession or financial crisis and has been amenable to standard economic tools, especially propping up the demand side. This is very different, with deep healthcare and supply side issues for which there is no standard well-tested playbook.

That being said, stay the course seems the best course. The problem comes when someone is forced to sell in order for their plan to have any reasonable chance of succeeding or, worse, in order to have food, housing, etc. In other words, when staying is not a psychological issue but a severe economic issue.

zwzhang
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Re: It's Not Different This Time

Post by zwzhang » Sun Mar 22, 2020 12:23 pm

nedsaid wrote:
Sun Mar 22, 2020 10:56 am
The thing is, we are seeing crazy things happen not only in the stock market but also in the bond market. The market can panic in ways that you never dreamed.
+1

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Re: It's Not Different This Time

Post by puc_ytpme » Sun Mar 22, 2020 12:24 pm

Taylor Larimore wrote:
Fri May 17, 2019 9:23 pm
alexfoo39:

At age 95, I have been through many bear markets. They are no fun. This was my first bear market:

Our family owned "Larimore's Diner" in Foxboro, Mass. in 1929 (I was 5 years old at that time). When the depression hit, we lost the Diner and moved into my grandfather's home in Miami. Grandfather, who was a millionaire investor and chief executive of an investment trust company, lost everything--including the Miami home we lived in.

BEAR MARKET OF 1929-1937 (Dow plunged 89%)
-1929--1930--1931--1932
(-31%)(-25%)(-43%)(-08%) Large Cap Stocks
(-34%)(-35%)(-47%)(-06%) Mid/Small Cap Stocks
(-47%)(-38%)(-50%)(-05%) Micro Cap Stocks

(+04%)(+07%)(-02%)(+09%) 5-Year Treasury Bonds

BEAR MARKET OF 1973-1976 (S&P fell 43%)
-1973--1974
(-15%)(-26%) Large Caps
(-39%)(-29%) Micro Caps

---(-70%) Coca-Cola
---(-82%) Intel
---(-73%) McDonald's
---(-86%) Merrill Lynch
---(-86%) Walt Disney
---(-71%) Xerox

Figures cannot convey the horrifying and debilitating effects of a bear market. You watch in agony as month after month your life savings evaporate before your eyes. Gloom and doom talk is everywhere. Nearly everyone else is selling. You have no idea when, or if, your portfolio will stop losing money.

Your friends and relatives urge you to sell. Nearly all financial experts recommend "sell". You are ridiculed for trying to hold on. You begin to have self-doubt. Despair sets in. Buying stocks is unthinkable. Suicides increase. That's a REAL bear market.

This is why many people in retirement have 40-70% in bonds.

Best wishes.
Taylor
I Thought Taylor’s experience & longevity would mesh with this thread.

There is no one word or phrase that can sum up this moment in time. However, we all share in one thing in the present. The unknown, & the emotions that come along with such heightened anxiety.

We will make it through this... ETA, unknown! What is known, is that I will
press on regardless
& accept life on life’s terms as if I had chosen this very moment. We are in this together. Chin up, we are not alone!

Jim, thanks for being on the front line during this time

All the best
No person ever steps in the same river twice, for it’s not the same river & they’re not the same person

pennywise
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Re: It's Not Different This Time

Post by pennywise » Sun Mar 22, 2020 12:37 pm

8foot7 wrote:
Sun Mar 22, 2020 11:41 am
With respect, there is no way you can know at this point whether this time is different or not. I agree most of the time “this” time has not been different. There is always risk and a non-zero chance of loss. Perhaps a better title would be “most likely this time is not different.”
With respect, WCI is correct, this time is not different in the sense he explains: economic systems all have downturns and they eventually all go back up.

This is not going to be a situation in which the nation, region or globe's financial systems collapse and never recover. It simply isn't.

So it is a true statement that this time isn't different.

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birdog
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Re: It's Not Different This Time

Post by birdog » Sun Mar 22, 2020 12:50 pm

Turkishcoffee wrote:
Sun Mar 22, 2020 12:16 pm
WW1 was never a “given” to win
WW2 was never a given to win
The Cuban missile crisis made the world feel like it was on the brink of utter destruction
20% interest rates in the 70’s
Terrorists flying into buildings in 2001
2008 massive capital crunch and bank failures

All were major problems, many of which the end was never a sure thing. These were INVOLUNTARY economic issues,

That is not to say this is not going to have a deep and painful impact, but we have intentionally shut down demand and supply. Some companies will recover, some will grow stronger from the competitive landscape and others will innovate and flourish. We are likely to be much better prepared for the next pandemic and vastly improve our sanitization of travel etc.

It’s different, but it’s not “different”.
Couldn’t agree more. Well said.

theplayer11
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Re: It's Not Different This Time

Post by theplayer11 » Sun Mar 22, 2020 1:02 pm

From my experience, it's always a buying opportunity when the there is panic and doom and gloom posts are everywhere. The market low will be when things look the worst and many are too scared to do a thing.

hoops777
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Re: It's Not Different This Time

Post by hoops777 » Sun Mar 22, 2020 1:02 pm

100 pct absolutely different this time. Being a doc you of all people should know this. We are in uncharted territory.
Now, does that mean you should be changing your investment plan? Probably not.
I am 68 years old and do not remember ever being confined to my home until April 17, at least.I do not ever remember a time where schools and work were all closed down for weeks and probably months.
Better rethink that title, or clarify a few things.
K.I.S.S........so easy to say so difficult to do.

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8foot7
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Re: It's Not Different This Time

Post by 8foot7 » Sun Mar 22, 2020 1:05 pm

pennywise wrote:
Sun Mar 22, 2020 12:37 pm
8foot7 wrote:
Sun Mar 22, 2020 11:41 am
With respect, there is no way you can know at this point whether this time is different or not. I agree most of the time “this” time has not been different. There is always risk and a non-zero chance of loss. Perhaps a better title would be “most likely this time is not different.”
With respect, WCI is correct, this time is not different in the sense he explains: economic systems all have downturns and they eventually all go back up.

This is not going to be a situation in which the nation, region or globe's financial systems collapse and never recover. It simply isn't.

So it is a true statement that this time isn't different.
I hope that you are right but unless you have a crystal ball, “it simply isn’t” is not a statement you can defend. It simply isn’t. :sharebeer

For one there’s not a time in the last 50 years that I can remember that I could not buy toilet paper for three weeks straight. So that is different 8-)
Last edited by 8foot7 on Sun Mar 22, 2020 1:07 pm, edited 2 times in total.

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Mountain Doc
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Re: It's Not Different This Time

Post by Mountain Doc » Sun Mar 22, 2020 1:06 pm

White Coat Investor wrote:
Sun Mar 22, 2020 9:53 am
...
Stay the course. We don't know how deep this bear will go. We don't know when it will end. But we do know two things:

# 1 It will end.
# 2 Those who continue to follow their reasonable written plan will be glad they did so on the other side of it while those who panicked and sold low will regret their actions.

Good luck investing. Stay healthy.
Many forum participants seem to misunderstand what is meant by "It's not different this time," because they immediately respond with something like "but it is different this time, because never before have we had [fill in the compelling narrative]"

In a bear market, there is always a compelling narrative about how "this time it's different." That's why it is used by panic sellers in every bear market.

"This time is different, because we've never before had double digit inflation and 20% interest rates." (1970s)
"This time is different, because we've never before had the market drop >20% in a single day for no reason." (1987)
"This time is different, because we've never before had terrorists indiscriminately wiping out citizens en masse." (2001)
"This time is different, because we've never before had a complete credit crisis take down the entire financial system." (2008)

All of those statements carried truth. However, they did not mean the right strategy had changed. Through all of those unique crises, the right strategy was to maintain an adequate emergency fund and stay the course with a broadly diversified portfolio of index funds that matched your risk tolerance. In that sense, "It's not different this time."

Yes, this time is a different narrative. No, you still don't know more than the market and cannot time it successfully except by luck. The best you can do is stick with the long-term plan.
Last edited by Mountain Doc on Sun Mar 22, 2020 1:08 pm, edited 2 times in total.

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White Coat Investor
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Re: It's Not Different This Time

Post by White Coat Investor » Sun Mar 22, 2020 1:06 pm

8foot7 wrote:
Sun Mar 22, 2020 11:41 am
With respect, there is no way you can know at this point whether this time is different or not. I agree most of the time “this” time has not been different. There is always risk and a non-zero chance of loss. Perhaps a better title would be “most likely this time is not different.”
If it is different it doesn't matter what you do with your investments.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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Re: It's Not Different This Time

Post by White Coat Investor » Sun Mar 22, 2020 1:08 pm

jeffyscott wrote:
Sun Mar 22, 2020 11:26 am
Nice list of the greatest hits of the last collapse, but I think this one belongs at the top of the charts:

viewtopic.php?f=10&t=30085
Added to the list.
jeffyscott wrote:
Sun Mar 22, 2020 11:26 am
Oh, BTW, your first two are the same discussion.
Fixed.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

metalworking
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Re: It's Not Different This Time

Post by metalworking » Sun Mar 22, 2020 1:10 pm

White Coat Investor wrote:
Sun Mar 22, 2020 1:06 pm
8foot7 wrote:
Sun Mar 22, 2020 11:41 am
With respect, there is no way you can know at this point whether this time is different or not. I agree most of the time “this” time has not been different. There is always risk and a non-zero chance of loss. Perhaps a better title would be “most likely this time is not different.”
If it is different it doesn't matter what you do with your investments.
This is the only thing that kept me from panicking in 2008 as well as now. If things get that bad then money will likely be the least of my worries.

Unladen_Swallow
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Re: It's Not Different This Time

Post by Unladen_Swallow » Sun Mar 22, 2020 1:10 pm

nedsaid wrote:
Sun Mar 22, 2020 10:56 am
I have done nothing.
+1
"I think it's much more interesting to live not knowing than to have answers which might be wrong." - Richard Feynman

hoops777
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Re: It's Not Different This Time

Post by hoops777 » Sun Mar 22, 2020 1:12 pm

Mountain Doc wrote:
Sun Mar 22, 2020 1:06 pm
White Coat Investor wrote:
Sun Mar 22, 2020 9:53 am
...
Stay the course. We don't know how deep this bear will go. We don't know when it will end. But we do know two things:

# 1 It will end.
# 2 Those who continue to follow their reasonable written plan will be glad they did so on the other side of it while those who panicked and sold low will regret their actions.

Good luck investing. Stay healthy.
Many forum participants seem to misunderstand what is meant by "It's not different this time," because they immediately respond with something like "but it is different this time, because never before have we had [fill in the compelling narrative]"

In a bear market, there is always a compelling narrative about how "this time it's different." That's why it is used by panic sellers in every bear market.

"This time is different, because we've never before had double digit inflation and 20% interest rates." (1970s)
"This time is different, because we've never before had the market drop >20% in a single day for no reason." (1987)
"This time is different, because we've never before had terrorists indiscriminately wiping out citizens en masse." (2001)
"This time is different, because we've never before had a complete credit crisis take down the entire financial system." (2008)

All of those statements carried truth. However, they did not mean the right strategy had changed. Through all of those unique crises, the right strategy was to maintain an adequate emergency fund and stay the course with a broadly diversified portfolio of index funds that matched your risk tolerance. In that sense, "It's not different this time."

Yes, this time is a different narrative. No, you still don't know more than the market and cannot time it successfully except by luck. The best you can do is stick with the long-term plan.
I believe everyone understands your point. My personal opinion is the doc made an error in judgement with the title. That’s all. There is a lot of anxiety about simple day to day living because instantly, life is totally different.
Last edited by hoops777 on Sun Mar 22, 2020 1:16 pm, edited 1 time in total.
K.I.S.S........so easy to say so difficult to do.

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whodidntante
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Re: It's Not Different This Time

Post by whodidntante » Sun Mar 22, 2020 1:13 pm

Jim, has this crisis made you question your large allocation to munis yet?

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Mountain Doc
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Re: It's Not Different This Time

Post by Mountain Doc » Sun Mar 22, 2020 1:16 pm

hoops777 wrote:
Sun Mar 22, 2020 1:12 pm
Mountain Doc wrote:
Sun Mar 22, 2020 1:06 pm
White Coat Investor wrote:
Sun Mar 22, 2020 9:53 am
...
Stay the course. We don't know how deep this bear will go. We don't know when it will end. But we do know two things:

# 1 It will end.
# 2 Those who continue to follow their reasonable written plan will be glad they did so on the other side of it while those who panicked and sold low will regret their actions.

Good luck investing. Stay healthy.
Many forum participants seem to misunderstand what is meant by "It's not different this time," because they immediately respond with something like "but it is different this time, because never before have we had [fill in the compelling narrative]"

In a bear market, there is always a compelling narrative about how "this time it's different." That's why it is used by panic sellers in every bear market.

"This time is different, because we've never before had double digit inflation and 20% interest rates." (1970s)
"This time is different, because we've never before had the market drop >20% in a single day for no reason." (1987)
"This time is different, because we've never before had terrorists indiscriminately wiping out citizens en masse." (2001)
"This time is different, because we've never before had a complete credit crisis take down the entire financial system." (2008)

All of those statements carried truth. However, they did not mean the right strategy had changed. Through all of those unique crises, the right strategy was to maintain an adequate emergency fund and stay the course with a broadly diversified portfolio of index funds that matched your risk tolerance. In that sense, "It's not different this time."

Yes, this time is a different narrative. No, you still don't know more than the market and cannot time it successfully except by luck. The best you can do is stick with the long-term plan.
I believe everyone understands your point. My personal opinion is the doc made an error in judgement with the title. That’s all.
Clearly not everyone does, since so many have changed their strategy on the grounds that "this time (the narrative) is different."

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nedsaid
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Re: It's Not Different This Time

Post by nedsaid » Sun Mar 22, 2020 1:20 pm

Hate to break it to you sports fans, Bogleheads is a form of social media.
A fool and his money are good for business.

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Re: It's Not Different This Time

Post by White Coat Investor » Sun Mar 22, 2020 1:20 pm

Elysium wrote:
Sun Mar 22, 2020 11:33 am
It was easier since I was much younger and didn't have a lot of money.
Yes, each bear market you lose more money. I lost $78K in 2008. I've already lost 7 figures this time. I hope I can lose even more money in the next bear market.

This is my fourth bear market (2008, 2011, 2018, 2020), but so far has been the easiest to handle emotionally. I've seen this movie before and I know how it ends. And in the infinitesimal chance that it doesn't end the same way as every other bear market in history, it doesn't matter what I do with my investments.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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Re: It's Not Different This Time

Post by anonsdca » Sun Mar 22, 2020 1:21 pm

nedsaid wrote:
Sun Mar 22, 2020 1:20 pm
Hate to break it to you sports fans, Bogleheads is a form of social media.
I dont know about the sports fan, but I surely understand that it is.

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Re: It's Not Different This Time

Post by Shallowpockets » Sun Mar 22, 2020 1:31 pm

As long as you can keep BH perspective that this is no different, then you have absolutely no concept of anything else.
There are millions of people out there who do not have 20-30 years to recover as is so often stated here. That will be the sequela of these times. That attitudes about money and investment may change us so much that it is not different this time, it will be different after this time.
Remember a black swan is something unforeseen. Something no one can imagine. Something that is different for this time. Or any time. Certainly blind disregard of possibilities based on dogma that it is not different this time reinforces the idea that it is not.
Having said that, do I now obviate the possibility of it being called a black swan?

Slinky
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Re: It's Not Different This Time

Post by Slinky » Sun Mar 22, 2020 1:33 pm

Wasn’t the Spanish flu a black swan?
World wars?
9/11
2008

Isn’t that the point?

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Re: It's Not Different This Time

Post by Que1999 » Sun Mar 22, 2020 1:35 pm

In my opinion, it is different this time.

I don't think we've ever seen anything like this before. A possible shut-down of the American and World economies is a possibility... This is nothing like 2008 or any other Bear market we've seen before. A healthcare system overload, people out of work for extended periods of time because they simply aren't allowed to go outside, things like that can lead to total chaos... Believe me I'm not into fear-mongering, but I know what people are capable of when they're put into desperate situations, and it is not pretty.

That being said, I agree that nothing can be done. Your retirement account and investments accounts are irrelevant if it is different this time. Therefore, I will stay the course and hope the Government, the people and the world make it through this one like we have consistently throughout history.

What other choice do we have?
Last edited by Que1999 on Sun Mar 22, 2020 4:08 pm, edited 1 time in total.

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Re: It's Not Different This Time

Post by Cyclesafe » Sun Mar 22, 2020 1:39 pm

cheese_breath wrote:
Sun Mar 22, 2020 12:22 pm
Different.. Not as many people jumping out of windows this time, because they can't.
Spit my coffee on that one.....
"Plans are useless; planning is indispensable.” (Dwight Eisenhower) | "Man plans, God laughs" (Yiddish proverb)

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Re: It's Not Different This Time

Post by thx1138 » Sun Mar 22, 2020 1:40 pm

Spot on post.

And at the risk of channeling Yogi Berra what it is all down to is that it's not different this time because it is always different every time so it isn't different this time since it's different just like it always is.

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Re: It's Not Different This Time

Post by UpperNwGuy » Sun Mar 22, 2020 1:45 pm

I just read this entire thread from top to bottom. I agree with the OP's statement that it's not different this time. I read all of the comments taking issue with his statement and did not find a single one of them to be convincing.

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Re: It's Not Different This Time

Post by hoops777 » Sun Mar 22, 2020 1:46 pm

Mountain Doc wrote:
Sun Mar 22, 2020 1:16 pm
hoops777 wrote:
Sun Mar 22, 2020 1:12 pm
Mountain Doc wrote:
Sun Mar 22, 2020 1:06 pm
White Coat Investor wrote:
Sun Mar 22, 2020 9:53 am
...
Stay the course. We don't know how deep this bear will go. We don't know when it will end. But we do know two things:

# 1 It will end.
# 2 Those who continue to follow their reasonable written plan will be glad they did so on the other side of it while those who panicked and sold low will regret their actions.

Good luck investing. Stay healthy.
Many forum participants seem to misunderstand what is meant by "It's not different this time," because they immediately respond with something like "but it is different this time, because never before have we had [fill in the compelling narrative]"

In a bear market, there is always a compelling narrative about how "this time it's different." That's why it is used by panic sellers in every bear market.

"This time is different, because we've never before had double digit inflation and 20% interest rates." (1970s)
"This time is different, because we've never before had the market drop >20% in a single day for no reason." (1987)
"This time is different, because we've never before had terrorists indiscriminately wiping out citizens en masse." (2001)
"This time is different, because we've never before had a complete credit crisis take down the entire financial system." (2008)

All of those statements carried truth. However, they did not mean the right strategy had changed. Through all of those unique crises, the right strategy was to maintain an adequate emergency fund and stay the course with a broadly diversified portfolio of index funds that matched your risk tolerance. In that sense, "It's not different this time."

Yes, this time is a different narrative. No, you still don't know more than the market and cannot time it successfully except by luck. The best you can do is stick with the long-term plan.
I believe everyone understands your point. My personal opinion is the doc made an error in judgement with the title. That’s all.
Clearly not everyone does, since so many have changed their strategy on the grounds that "this time (the narrative) is different."
Everyone is different. Hopefully people will not sell in a panic and create permanent losses. Life goes on but differently. What is worrisome is people being cooped up at home with social media. That will be interesting in terms of how it changes investing behavior.
K.I.S.S........so easy to say so difficult to do.

winterfan
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Re: It's Not Different This Time

Post by winterfan » Sun Mar 22, 2020 1:50 pm

nedsaid wrote:
Sun Mar 22, 2020 10:56 am
I have done nothing.
I haven't either. Except I did peek at our investments yesterday after I said I wouldn't. Ouch! Oh well, nothing to do but stay the course. I am tempted to rebalance, but I only do it once a year, so I guess I'll wait on that too. Maybe I'll just bake some cookies.

hoops777
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Re: It's Not Different This Time

Post by hoops777 » Sun Mar 22, 2020 1:56 pm

UpperNwGuy wrote:
Sun Mar 22, 2020 1:45 pm
I just read this entire thread from top to bottom. I agree with the OP's statement that it's not different this time. I read all of the comments taking issue with his statement and did not find a single one of them to be convincing.
You know that you do not have to be convinced. For the people who feel it is different this time, it is to them. I do not believe anyone is saying you should throw out your investment plan.I may be wrong, but I believe the point about it being different,very different, is not about investing, but how it is changing our day to day lives. The feeling is unlike anything we have experienced as a country. Yes we had the Spanish flu, but now we have 24 hour cable tv and social media. The doc was obviously talking only about investing, but my point about how people are feeling is a reaction to his title. Frivolous but these are strange times.
Last edited by hoops777 on Sun Mar 22, 2020 1:58 pm, edited 1 time in total.
K.I.S.S........so easy to say so difficult to do.

RJC
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Re: It's Not Different This Time

Post by RJC » Sun Mar 22, 2020 1:56 pm

We have done nothing as well other than buy after really bad days (from recently distributed RSUs). We still buy in every pay period and stay the course.

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Re: It's Not Different This Time

Post by David Jay » Sun Mar 22, 2020 1:57 pm

thx1138 wrote:
Sun Mar 22, 2020 1:40 pm
...it's not different this time because it is always different every time so it isn't different this time since it's different just like it always is.
Brilliant!
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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Re: It's Not Different This Time

Post by LadyGeek » Sun Mar 22, 2020 1:57 pm

I removed an off-topic interchange regarding government control of media vs. privacy (First Amendment rights).

Please stay on-topic, which are the financial aspects.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

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Re: It's Not Different This Time

Post by Normchad » Sun Mar 22, 2020 1:58 pm

I agree with the OP. I don't think it's different this time either. Of course, it doesn't matter what I think, or what anybody else thinks, everybody is free to do as they please. (Honestly I think this will be a distant memory soon; just as global financial crisis of ten years ago was soon forgotten).

Maybe people are reading too much into a lot of the common rules of thumb, such as "this time it's different". For every bear market, the details are different, and often times the catalyst is different. But for me, my course of action isn't different. A lot of us agree you should have a plan, and stick to it. And our plans should account for bad markets, because they happen frequently.

On paper, I've lost over $500K. But I'm not going to panic, or change what I do. I'll be buying again on the 1st of the month, just as I always do. I tend to think in dollars, but really what I own is a fractional ownership of most of the companies in America.

I don't think it's different this time. Things are bad, and they have been worse in the past. The worst may be ahead of us. But I believe this will pass eventually, the economy will recover eventually, and America and the world will get up off the Matt and get back to work.

So my choice right now is, do I want to be a part owner of the companies that are going to bring us back? Heck yes I do. If I sell now, I'm just guaranteeing that I will miss out on that.

Now if it really is different this time, if this is the end of financial markets; that is truly unfathomable to me. But whatever I do now, it won't save me if that happens.

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Re: It's Not Different This Time

Post by drk » Sun Mar 22, 2020 2:02 pm

whodidntante wrote:
Sun Mar 22, 2020 1:13 pm
Jim, has this crisis made you question your large allocation to munis yet?
I'm curious about this, too.

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Re: It's Not Different This Time

Post by bertilak » Sun Mar 22, 2020 2:06 pm

nedsaid wrote:
Sun Mar 22, 2020 10:56 am
I have done nothing.
I did three things:
  1. TLH
  2. rebalance
  3. reallocate from 50/50 to 60/40
Yes, I know number 3 is naughty but I had been considering that move for some time and could not resist mixing it in with 1 and 2. They almost forced my hand. Once the money is up in the air you might as well let it land where you want it.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet

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