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Manias, Panics, and Crashes: A History of Financial Crises

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As a reminder of how ugly markets can be, this holiday season, Your Survival Guy’s been thumbing through Manias, Panics, and Crashes: A History of Financial Crises (fourth edition) by Charles P. Kindleberger. I’ll offer some titles that also work: Bad Stuff Happens, Look Out Below, They Never Learn.

The first edition was published in 1978 with plenty of pre-World War II disasters to cover. But what has me thinking this morning is that the latest one, the fourth edition, was written in 2000 before the dot com crash. Little did Kindleberger know what was about to take place, or did he sense it? He certainly knew before his passing in 2003.

Which brings me to our current 21st century. As I’ve noted, so far this century, we’ve had three beauties with the tech crash, followed by the financial crisis, and the more recent Covid debacle. Not once, twice, but thrice, investors have been separated from their money, with many not returning until the coast is clear. Which it never is. It’s the manmade disasters that can be the most devastating.

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And their occurrence doesn’t need to be frequent. Because when the black swan swoops in, it’s life-changing with its slow, then quick realization “this may never come back.” That’s why Your Survival Guy invests with history in mind. I know how brutal history has been and know that it repeats.

It’s why the arithmetic of losses needs to be one’s guide, as it is for me, and may I suggest the same for you and your family.

Action Line: Remember, the agony of defeat lasts far longer than the thrill of victory. Let’s talk.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.
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