'Bubbles, Manias & Fraud' with Jamie Catherwood

Dec 23, 2020

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day.

2020 has been a year like no other in living memory. Though the global pandemic has obviously been the most important story of the year (and quite possibly of a generation), stocks have rallied to new all-time highs, companies have raised record amounts of capital and the technology sector has minted a handful of TRILLION-dollar firms. Though some investors find this fitting with the ‘new normal’, others are convinced this is the ‘mother of all bubbles’.

To make sense of these unusual times, there’s nothing like a good dose of historical perspective. For the final show of the year, financial historian Jamie Catherwood (O'Shaughnessy Asset Management & Investor Amnesia) joined us for a great conversation that included:

• The origins of capital markets and its countless manias
• The South Sea Bubble, John Law and the Mississippi Company
• Why the history of the Dutch Tulip Mania has been widely exaggerated
• Charlie Munger’s three I’s – innovators, imitators and idiots
• How wars invariably lead to periods of low interest rates (and eventually bubbles)
• Yield-seeking in the 18th and 19th century – and plenty of sovereign debt defaults

Jamie shared numerous interesting anecdotes that seem to draw clear parallels to the current environment – which has been described by some as ‘the golden age of fraud’. You can find more of these in his new course.

Happy Holidays! Thank you for watching and listening. See you in January.