Attributes Quote by Robert D. Arnott
“Whatever is newly expensive has two attributes: wonderful past returns and, in most cases, lousy future returns.”
About This Quote
Source Book: The Little Book of Common Sense Investing, 2005
Investments that have recently become costly often look attractive because of past performance, but they usually underperform going forward.
In simple terms: Expensive assets often have bad future returns.
Key Takeaway
Beware of chasing past winners.
Themes
investing
risk
valuation
behavioral finance
Mood
cautious
analytical
Type
financial
advisory
When to use this quote
- stock picking
- portfolio rebalancing
- retirement planning
- risk management
Key Concepts
mean reversion
overconfidence
market cycles
Questions to Reflect On
- Do you evaluate assets based on fundamentals or recent price trends?
- How can you guard against overpaying for past success?
A Different Perspective
Past performance is not a reliable predictor of future results.
![“Most people will see declining returns [due to inflation]. One of the great defenses if you're worried about inflation is not to have a lot of silly needs in your life - you don't need a lot of material goods.” quote by Charlie Munger](https://sms4smile.com/quotes/img-quotes/c1b/charlie-munger-458_defense_most-people-will-see-declining-returns-d_2532092.jpg)
