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Friday, January 09, 2009

Quote of the day

“We will learn an enormous amount in a very short time, quite a bit in the medium term, and absolutely nothing in the long term.” -- Jeremy Grantham


This is a wonderful quote, if a pessimistic one.

In the long term, we tend to forget history. Now is a wonderful time to remember that we once learned that the 1929 stock market crash and the subsequent Depression was due to the collapse of excessive leverage. However, it would have been much better had we remembered that a few years ago, say in 2002.