About 30 years ago I wrote a research report, “It Is Really Different This Time” that in hindsight proved prescient in forecasting the impact technology would have on every aspect of our lives—work, play, entertainment, and more. As a result, the investment implications would prove to be equally profound. It was a very big call at the time.

I’m making another big call today:

A New Super Growth Cycle Is About to Start

Unfortunately, I didn’t save a copy of the original report. However, an AI search for the piece turned up the following:

“It’s Really Different This Time” was a notable research report written by Bruce Lupatkin, the Director of Research at the investment bank Hambrecht & Quist (H&Q), in 1995.

The report is famously remembered in financial circles—often with a touch of irony—because it defended the high valuations of technology stocks just as the Dot-com bubble was beginning to inflate. While “this time is different” is often called the four most dangerous words in investing, Lupatkin’s report argued that fundamental shifts in the economy justified the surge in tech prices.

Key Themes of the Report

Lupatkin argued that the traditional rules of valuation were no longer sufficient for the burgeoning “New Economy.” His main points included:

• Structural Shifts: The rise of the internet and networking (the “Information Age”) was a once-in-a-century transformation.
• Productivity Gains: Technology was driving unprecedented efficiency across all industries, not just in tech firms.
• Earnings Potential: Modern tech companies had scalable models that would lead to higher long-term profit margins than industrial-era companies.
• Valuation Defense: He suggested that high Price-to-Earnings (P/E) ratios were justified because of the accelerated growth rates of these companies.

Historical Context

• The Author: Bruce Lupatkin was a highly influential technology strategist. He served as the Director of Research at H&Q from 1994 to 1998, a period when H&Q was a premier boutique bank for Silicon Valley IPOs, including Netscape in 1995.
• The Timing: 1995 was the year the public truly “discovered” the internet. Netscape’s IPO that August is often cited as the starting gun for the tech boom.
• The Legacy: The report became a symbol of the era’s optimism. When the bubble eventually burst in 2000, critics often pointed back to such reports as evidence of the “irrational exuberance” that fueled the crash.

Why It Matters Today

Lupatkin’s report remains a staple in market history discussions. It serves as a case study for:

1. Technological Paradigms: How genuine innovation can cloud traditional financial judgment.
2. Market Cycles: The tendency for experts to believe the “old rules” no longer apply during massive bull markets.
3. H&Q’s Influence: It highlights how boutique banks played a central role in legitimizing the tech sector to institutional investors.