Zerodha founder and CEO Nithin Kamath has shared a reflective post on the recurring nature of market booms and crashes, pointing out that greed and leverage continue to drive financial cycles, much like they did a century ago.
Kamath Recommends Andrew Ross Sorkin’s 1929 as Essential Reading
In a recent post on LinkedIn, Kamath urged market participants to read 1929 by Andrew Ross Sorkin, describing it as “a must-read for anyone in the markets — stocks, commodities, or crypto.”
Citing former US President Herbert Hoover, he highlighted a quote that captures the essence of recurring market excesses:
“The only problem with capitalism is capitalists. They’re too damn greedy.”
“Every Crash Follows the Same Script”
Kamath reflected on how greed repeatedly fuels asset bubbles that eventually burst. Drawing from history, he noted that crashes in 1907, 1929, 1987, 2001 (Dot-com) and 2008 (Global Financial Crisis) all share a familiar pattern.
“Every crash … follows the same script. Greed drives markets higher, inflating bubbles that draw in even those who don’t understand the risks. As euphoria builds, leverage accumulates quietly somewhere in the system: loans, margins, complex derivatives. It always finds a home. This is the boom.”
He described how this build-up of leverage eventually leads to sharp corrections:
“Then comes the bust. One day, the bubble pops. The leverage unwinds with unstoppable force, amplifying losses as cascading sell-offs feed on themselves. Markets crash, fortunes evaporate, and the cycle reaches its end.”
Lessons Learned but Patterns Repeated
Kamath observed that while regulations evolve after every financial crisis, the underlying human impulses remain constant.
“In the aftermath, lessons are learned. Regulations target the specific form of leverage that caused the crisis. The mechanism gets fixed, reformed, and contained. But greed never disappears. It simply waits, then returns in a new form, finding fresh channels for leverage that no one is watching.”
His post ends with a concise reminder that market stories may differ across decades, but their outcomes remain strikingly similar:
“Different stories. Same ending.”
A Reminder on Market Psychology
Kamath’s reflection has resonated widely among investors and traders for its clear portrayal of market psychology and investor behaviour. Known for his focus on financial literacy and sustainable investing, Kamath often shares insights that challenge short-term speculation.
His latest post serves as a reminder that no matter how advanced or regulated markets become, the core forces of greed, risk, and emotion remain unchanged — shaping the rhythm of every boom and bust.
Muskaan Kapoor
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