Markets Never Forget But People Do: How Your Memory Is Costing You Money - And Why This Time Isn't Different

Why do so many investors make the same mistakes repeatedly — being too bullish or too bearish at just the wrong times? Because they forget. Forgetting pain is an instinct — humans have evolved that way to better cope with the problems of survival. But for the complex and often counterintuitive world of investing, it causes serious errors.“This time it’s different” are the four most expensive words in the English language (according to investing legend Sir John Templeton). Yet many investors routinely fall into the trap of thinking “now” (whenever “now” is) is different somehow. In Markets Never Forget (But People Do): How Your Memory Is Costing You Money — and Why This Time Isn’t Different, four-time New York Times bestselling author Ken Fisher shows readers how their memories play (often costly) tricks on them—and how they can combat their faulty memories with just a bit of history. This isn’t to say history repeats itself perfectly. It doesn’t — but a recession is a recession. Some are vastly worse than others — but investors have lived through them before. Credit crises aren’t new, nor are bear markets — or bull markets. Geopolitical tension is as old as mankind, as is war and even terrorist attacks. Understanding how investors have reacted to similar past events can help guide investors in shaping better forward-looking expectations. The past never predicts the future, but it can reduce guesswork about what’s ahead.In this book, Fisher takes aim at some major market memory mishaps — like the idea stocks have become inherently more volatile or that wildly above- or below-average returns are abnormal. He shows how, early in every recovery, investors don’t believe in it — often at a huge cost. And he shows how, in investing, ideology is deadly. Most important, he teaches how you can use history as one powerful tool to help begin reducing your error rate and help begin getting better investing results.

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.