The five-year anniversary of the stock-market peak arrived with fanfare in March, but few commentators drew a true picture of why stocks reached the heights they did. Instead, most defaulted to the usual 20/20 hindsight and revisionism that has dominated the post-crash period. An honest look at the 1990s won’t stop the boom/bust phenomenon from recurring — history suggests that bubbles are as inevitable as hurricanes — but it might help dispel the notion that it will be different next time.
The 1990s, like other such eras, is now viewed as a bizarre anomaly, a period in which investors “went insane” and markets were dominated by crime, stupidity, and greed.
In some cases, these descriptions are accurate, but they are also symptoms, not causes.
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