Markets Never Forget: How Your Memory Is Costing You Money and Why This Time Isn't Different

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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 costlythat 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. About The Author KEN FISHER (Woodside, CA) is best known for his prestigious "Portfolio Strategy" column in Forbes magazine, where his over 25-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 with over $32 billion under management (as of 6/30/10). Fisher is ranked #289 on the 2009 Forbes 400 list of richest Americans, and #721 on the 2010 Forbes Global Billionaire list. In 2010, Investment Advisor magazine named him as one of the 30 most influential individuals of the last three decades. Fisher has authored numerous professional and scholarly articles, including the award-winning article, "Cognitive Biases in Market Forecasting," and has published six previous books, including the New York Times and the Wall Street Journal bestsellers, The Only Three Questions That Count, The Ten Roads to Riches,How to Smell a Rat and Debunkery, all of which are 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, a contributing editor of MarketMinder.com, and coauthor 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 Acknowledgments Chapter 1 The Plain-Old Normal Yes Sir, Sir John The Normal Normal The Jobless Recovery The Always Feared, Rarely Seen Double Dip Chapter 2 Fooled by Averages Bull Markets Are Inherently Above Average Viva the V Normal Returns Are Extreme, Not Average The Pause That Refreshes (and Confuses) Getting Average Returns Is Hard--Really Hard Chapter 3 Volatility Is Normal--and Volatile What the Heck Is Volatility? Volatility Is Volatile The Daily Grind Stocks Are Less Volatile Than Bonds? Economic Volatility--Also Normal Volatility Isn't Inherently Bad Never a Dull Moment Chapter 4 Secular Bear? (Secular) Bull! Seeing the World Through Bear- Colored Glasses Two Secular Bear Markets? Stocks--Up Vastly More Than Down Chapter 5 Debt and Deficient Thinking Deficits Aren't Bad, but Surpluses Will Kill You The History of Big Government Debt Just Who Is at Default Here? Chapter 6 Long- Term Love and Other Investing Errors No One Category Is Best for All Time Long- Term Love Is Like Long- Term Forecasting--Both Wrong It's Still Heat Chasing Even When It Seems Safe Use History to Your Advantage Chapter 7 Poli-Ticking Enter the Ideology- Free Zone Your Party Isn't Better Presidents and Risk Aversion Perverse Inverse--It's Four and One Poli- Tics Go Global Poli- Tics Versus Entrepreneurs Chapter 8 It's (Always Been) a Global World, After All It's Always Been a Small World Seeing the World Right Conclusion Appendix Notes Index