Have You Passed Through This Night, Stranger?

Dear reader, The looming spectre of war in the Korean Peninsula. The forced mass migration of a people being persecuted because of their ethnicity. The threat of Terrorism. Concerns about the stability of financial markets and global growth. A hurricane hitting the South-Eastern coast of the United States.

Political and humanitarian crises abound everywhere we look. And yet they all seem strangely familiar. Each one of those events I wrote about above has happened in the last few decades, and they are all happening again today.

“All this has happened before, and all this will happen again”, so goes the line from Battlestar Galactica. The idea of eternal recurrence is not new. Many religions embrace it. But even without taking such a view, it is easy to see how the patterns of life spiral across history. Things are never quite the same: today’s refugee crisis will not look quite the same as yesterday’s. But happen they will.

It is difficult to predict when a hurricane will occur. They are non-linear, chaotic (in the mathematical sense) events. But they are not random. Hurricanes hit the South-Eastern coast of the US due to sun-heated bubbles of air above the Sudanese highlands colliding with the Africa Easterly Wave. A hurricane hitting Miami is not a question of If, but When.

“History doesn’t repeat itself, but it often rhymes.” – Mark Twain

It is no different with financial markets. While financial bubbles are similarly difficult to predict, or even identify except in hindsight, they are similarly the product of repeated factors. The greed of human excess combined with the fear of “missing out” drives asset prices ever higher. Who knows when the bubble will pop? I certainly don’t. But pop it will: sooner or later.

These are fundamental aspects of human nature: ways in which we deal with and react to the world. And the world reacts to us.

The most dangerous line is “this time it’s different”. Our eternal optimism lures us into believing that the seemingly eternal days of Summer will never cease. But the Sun is most beautiful right as it is setting.

Yours Sincerely,
Henry Chong

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