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Chapter 9. Holy Grails > Crash and Panic: Retirement Plans

Crash and Panic: Retirement Plans

What do Julian Robertson, the concept of losers average losers, and the dot-com stock crash have in common? The investment bubbles mentioned in Chapter 6. Dot-coms are no different from tulips or tea or land. In 1720, when the south sea bubble was at its height, even the greatest genius of his time, Sir Isaac Newton, got sucked into the hysteria. Investing as if his brilliance in science carried over to his finances, Newton eventually lost £20,000.

While bubbles may appear as short-term blips in economic history, more often the aftermath is long-term, resulting in severe recessions and government intervention that usually makes the situation worse. The collapse of bubbles of the past 400 years—threw each nation into a recession lasting a decade or longer. What lesson can we learn from bubbles? “Human nature continues to be the way it has always been and probably always will be.”[20]


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