Do we have better, more forgiving markets than our grandparents because we have new technologies and more sophisticated public policies? We don’t think so. Life, economies and capital markets tend to repeat because innovation, in all its forms, does not change the innate patterns of human behavior.

Our grandparents’ era, and their grandparents’ era before that, were shaped by commonly held economic and market expectations that ultimately proved terribly wrong. Ours is no different. New innovations and policies merely create a new consensus; they cannot permanently usurp natural economic and market truths and they cannot prevent a society’s tendency to gather around popular ideas. Common economic and investment wisdom today is likely as transient and unprofitable as was our ancestors’.

The profound truth, as we see it, is that one’s investment edge ultimately lies between the ears and along the spine. Truly independent-minded investors that do their homework, take their own counsel and then act -- even in the face of popular skepticism -- should prosper.