
Wahid Mohammad
@wahid9
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John Kenneth Galbraith ā āA Short History of Financial Euphoriaā (1990)
IMO all bubbles are similar to crypto market too.
Core idea:
Bubbles repeat because collective memory is short and greed is timeless.
Pattern of every mania.
1. A ānew eraā story catches fire (tulips, South Sea, ā29 stocks, junk bonds, dot-coms, crypto, etc.).
2. Prices surge, attracting fresh money and intellectāpeople mistake rising quotes for genius.
3. Easy credit/leverage turbo-charges gains and blinds participants to risk.
4. The establishment (banks, media, regulators, academics) cheers it on; no one wants the music to stop.
5. Skeptics are ridiculed until the bubble punctures.
6. Crash, blame, amnesia. Repeat next generation.
Galbraithās checklist to stay sane
- Doubt any pitch that starts with āthis time is different.ā
- Track leverage; when it soars, danger is near.
- Remember that wealth ā wisdom during a boom.
- Keep cashāand skepticismāready for the bust; thatās when real bargains appear.
Keep it handy the next time markets sound euphoric. 0 reply
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