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This time is different

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This time is different.

The world is changing in so many difficult ways that it's no wonder people are saying, in effect, "stop the world I want to get off!" Trump needs to be understood as an effect, not a cause.

I suspect that almost no one is NOT appalled by Trump; it's just that a lot of people are more appalled at what's happened to their lives than they are at him. There's a lot more going on than Donald Trump can fix, or any politician or central banker for that matter (or even get their head around I'd suggest).

It's often said that the most dangerous four words in investing are: "It's different this time". That phrase is only dangerous when used to justify inaction. When the phrase is used to support caution, it's not dangerous at all; it's prudent.

This time is very, very different, for a number of reasons:

  1. Global debt is the highest in history
  2. Population growth is declining at the fastest rate in history
  3. The most profound technological changes in history are happening
  4. There is the greatest movement of people around the globe — refugees, migrants, tourists — that the world has ever seen
  5. At the same time, the latest burst of globalisation seems to be ending
  6. China is once again the world's largest economy, 200 years after falling behind the US at the time of the Opium Wars
  7. Sexual norms have broken down — not only can we now partner with the same sex, we can BECOME the opposite sex
  8. Life expectancy is the greatest it has ever been, and still rapidly increasing
  9. Social media has produced a cacophony of opinions, mostly banal.

Obviously not all of these things are directly relevant to investors, but I think all of them contribute to the spot we're in.