Insana: When market pundits say, 'this time is different,' brace for the possibility that it's not

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Insana: When market pundits say, 'this time is different,' it's time to brace the possibility that it's not

Many pundits say a new wave of low-to-zero-cost trading and high-quality market information has "democratized" investing, but the pros always have an edge.

Now, some of us have recently questioned this line of reasoning as a more nuanced way of using the dreaded phrase "this time is different" when it comes to describing a bubble-like environment in financial assets.The rationalizations have been uttered by such notables as Chamath Palihapitiya, a billionaire investor himself, to Barstool's David Portnoy, a centimillionaire who claims stocks, or "stonks," in his parlance, can only go up.

The relatively recent action on Wall Street, about which I have expressed a great degree of caution, has been met with an equally great degree of derision by some internet gurus of current vintage … no need to belabor that point. Prominent economists and historians from John Kenneth Galbraith, "The Great Crash 1929," published in 1954, and "A Short History of Financial Euphoria," from 1993, to Edward Chancellor's, "Devil Take the Hindmost," published in 1999, to Charles P. Kindleberger's, "Manias, Panics and Crashes," from 1978, have written eloquently and clearly about the commonalities and repetitive nature of speculative episodes and financial market excesses.

 

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