Quote for the Week
Every great crisis reveals the excessive speculations of many houses which no one before suspected, and which commonly indeed had not begun or had not carried very far those speculations, till they were tempted by the daily rise of price and the surrounding fever…
They speculate with it in bubble companies and in worthless shares, just as they did in the time of the South Sea mania, when there were no banks, and as they would again in England supposing that banks ceased to exist. The mania of 1825 and the mania of 1866 were striking examples of this; the delirium of ancient gambling co-operated with the milder madness of modern overtrading. At the very beginning of adversity, the counters in the gambling mania, the shares in the companies created to feed the mania, are discovered to be worthless; down they all go, and with them much of credit.
The good times too of high price almost always engender much fraud. All people are most credulous when they are most happy; and when much money has just been made, when some people are really making it, when most people think they are making it, there is a happy opportunity for ingenious mendacity. Almost everything will be believed for a little while, and long before discovery the worst and most adroit deceivers are geographically or legally beyond the reach of punishment. — Walter Bagehot (source)
From the Archives
Last Call
- Priced for Perfection – Verdad
- The Market Waits for No One – TKer
- Nobody Knows Anything – TrendLabs
- Language, Time, and the Beauty of Nonlinear Thinking – Portfolio Charts
- Two Simple 401(k) Lessons for New College Grads – CRR
- Lifestyle Creep isn’t About Spending More – Meaningful Money
- Decision Making at the Highest Stakes – The Leap
- Value Creation, Bullshit Jobs and the Future of Work – S. Godin
- Why Airlines are Always Going Bankrupt – D. Oks
- Read Old Books – Investing 101