In a publish on X (previously Twitter), Kamath beneficial 1929 by journalist Andrew Ross Sorkin as “a must-read for anybody within the markets — shares, commodities, or crypto.” He quoted US President Herbert Hoover’s comment from that period: “The one drawback with capitalism is capitalists. They’re too rattling grasping.”
Kamath used the reference to make a bigger level — that regardless of evolving monetary devices, laws, and asset lessons, the market’s emotional DNA stays unchanged. “Each crash, 1907, 1929, 1987, 2001 (Dotcom), 2008 (GFC), and so many extra, follows the identical script,” he wrote.
In accordance with him, the story at all times begins the identical approach: greed drives costs greater, creating bubbles that appeal to even those that don’t totally grasp the dangers. As pleasure builds, leverage quietly piles up — by way of loans, margin trades, or complicated derivatives. “It at all times finds a house,” Kamath famous.
Then, inevitably, comes the reckoning. “Someday, the bubble pops,” he mentioned. “The leverage unwinds with unstoppable drive, amplifying losses as cascading sell-offs feed on themselves. Markets crash, fortunes evaporate, and the cycle reaches its finish.”
Kamath’s reflection captures the psychology that underlies not simply historic collapses just like the 1929 Wall Avenue crash or the 2008 monetary disaster, but in addition newer speculative manias in cryptocurrencies and smallcap shares.In his view, whereas every technology of buyers believes it’s witnessing one thing new, the sample hardly ever modifications — solely the devices do. “Within the aftermath, classes are discovered,” Kamath wrote. “Rules goal the particular type of leverage that precipitated the disaster. The mechanism will get mounted, reformed, and contained. However greed by no means disappears.”That recurring greed, he added, “merely waits, then returns in a brand new kind, discovering recent channels for leverage that nobody is watching. And the cycle begins once more. Completely different tales. Identical ending.”
Kamath’s publish resonates broadly amongst market individuals, notably in a 12 months when world equities have been unstable and speculative pockets within the Indian market — from smallcaps to thematic trades — have drawn regulator warnings.
The Zerodha founder has usually spoken about investor behaviour and threat in euphoric phases. His newest reminder — rooted in market historical past — underscores a timeless reality: whereas know-how and regulation evolve, human nature stays the most important variable in finance.
