Biggs on Finance, Economics, and the Stock Market: Barton's Market Chronicles from the Morgan Stanley Years

Section 1

WHAT'S OLD IS NEW AGAIN

Back across the ages, bear markets follow bulls as famine follows feast, and 3,000 years ago Joseph proved that anticipation of the inflection point can make tremendous difference in your life-style.

—Barton Biggs, April 1, 1996

Reading through over two decades of Barton's chronicles, it's hard to argue with one of his favorite adages, “history doesn't repeat itself, but it rhymes.” Biggs believed that a deep and thorough understanding of the past was important—nay, absolutely necessary—to preparing for the future. Like a symphony orchestra, the music may change and evolve, but ultimately the players behind the instruments remain the same. “The present always seems different from the past, but human nature doesn't change, and the patterns of fear and greed repeat.”

Biggs was fascinated with the mechanics of bubbles and panics and devoted numerous weekly missives to the topic. He read narrative accounts of past market crashes and assembled lists of dozens of “stock market breaks and deaths” from around the world—most unknown to the U.S. investor—which convinced him that the boom-bust cycle was not a rare occurrence, but an integral aspect of the market. Manias and panics are simply a phenomenon to be expected, understood, and planned for like any naturally occurring and ultimately unstoppable event such as a hurricane. Or as Biggs would say more ...