Are you worried yet?

Does the fact that we came roaring off the market bottom bother you?

Does the really severe recession we've been in, with its banking crisis, government takeover of companies, and double-digit unemployment, make you think that this time, it really is different?

John Mauldin believes it is. In a column written last June, he outlined several reasons why he believes that and why he thinks we are going to reset to a "new normal," one that involves lower consumer spending and a longer-than-usual recovery.

He could be right. Japan's economy, held up by many as an example of what we might be headed toward, has gone essentially nowhere for many years. The Nikkei index is actually down, a lot, over the past 10 and 20 years. More than 43% and 73%, respectively, in case you're interested.


I have a fundamental problem with arguments pinned upon the phrase: "This time it's different."

How it's been "different"
A decade ago, people were using that phrase to justify investing in Internet companies without earnings. Luckily, I stayed away from those, but I did buy shares of Cisco and Advanced Micro Devices (NYSE:AMD) rival Intel, believing their hypergrowth stories would hold true. "This time it's different." That worked out well.

The last few years, we watched housing prices go up and up and up. Models used by companies like American International Group (NYSE:AIG) and E*TRADE's (NASDAQ:ETFC) mortgage portfolio were based on increasing property values. Television shows were based on this belief. "This time it's different." Not the banks' best idea.

One more. Prior to the crash in commodity prices in mid-2008, we were told that the place to invest was in commodity companies such as fertilizer makers PotashCorp (NYSE:POT), steel producers like U.S. Steel (NYSE:X), or iron ore and coal producer Cliffs Natural Resources (NYSE:CLF). The emerging markets in Brazil, Russia, India, and China -- the BRIC nations -- would need everything they could produce, and prices would continue to rise. "This time it's different." Well, you get the idea.

Do you notice a pattern here? Each time investors believed that phrase, they got burned. And there's no reason to believe that the same won't hold true on the downside.

According to Robert Arnott, chairman of the asset management firm Research Affiliates, "The words 'This time it's different' are always a little alarming because they are used to justify poor investment choices."

The late Sir John Templeton called them, "The four most expensive words in the English language." And he should know: He lived through, and invested during, a lot of periods that could be called "different."

Plus ca change, plus c'est la meme chose
Sure, the Japanese market has been a basket case over a long period. But does that mean every company was terrible? Honda, for instance, is up more than 640% over the past 20 years, with an early 2007 peak performance of more than 780%. And that's neither an obscure company, nor the only example.

My colleague Ilan Moscovitz pointed out that since the last recession, an investment in Apple returned more than 1,000% to investors, while one in Gilead Sciences (NASDAQ:GILD), a biotech company, gave back more than 800%.

Mauldin could be right. Maybe this time it really is different. But as those examples show you, if you stop investing, you miss out on chances like these. Our job as investors is to try to find companies that perform well and that we can feel comfortable investing in.

One such, a recommendation of Motley Fool Stock Advisor, is It started out as an online bookseller, but has since branched out into music, movies, even kid's clothing. Its solid balance sheet, ability to generate tons of free cash flow, and money-saving offers for cash-strapped consumers make it an investment worth considering regardless of whether or not it's different this time.

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This article was originally published on Oct. 9, 2009. It has been updated.

Jim Mueller owns shares of Agrium, but none of the others mentioned. Apple and Amazon are Stock Advisor selections. Intel is an Inside Value selection, and Motley Fool Options has recommended buying calls on it. The Fool's disclosure policy is probably no different from the last time you read it, but you might want to check.