‘Then The Bubble Pops’: Nithin Kamath Says ‘1929’ Book A Must-Read For Investors
The one common driver of every boom-and-bust cycle is greed, highlights Kamath
Every market crash follows the same script, according to Zerodha co-founder Nithin Kamath. The one common driver of every boom-and-bust cycle is greed, highlights Kamath, stating that first it inflates the bubble and then the "bubble pops".
In a post on X (formerly Twitter), he recommended Andrew Ross Sorkin’s 1929 as "a must-read" for investors, quoting former US President Herbert Hoover’s remark from the book: “The only problem with capitalism is capitalists. They’re too damn greedy.”
In his post, Kamath drew parallels between historic market crashes, from 1907 to 2008, and the current investment pattern. He draws a conclusion that in every crash the common driver has been greed.
"1929 by @andrewrsorkin is a must-read for anyone in the markets — stocks, commodities, or crypto. He quotes US President Hoover (1929): “The only problem with capitalism is capitalists. They’re too damn greedy.” Every crash, 1907, 1929, 1987, 2001 (Dotcom), 2008 (GFC), and so many more, 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," explains Kamath.
He further wrote, "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. 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. And the cycle begins again. Different stories. Same ending."
