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The Modern Echo of 1929: Why Today’s Market Mania Could End the Same Way
A personal reflection
I’ll never forget the day I sat in a small investor-seminar back when I was still cutting my teeth in the markets. I overheard someone say, “This time it’s different” — and instinctively I felt the hairs rise on the back of my neck. Because I’d studied previous bubbles, I knew that phrase is almost always a red-flag. Fast forward to today, I’ve spent [Insert Your Niche Experience] years watching every market cycle, and now the parallels between our market environment and the run-up to the Wall Street Crash of 1929 have me extremely alert.
What’s going on: front-page news & underlying context
In his recent book 1929, Andrew Ross Sorkin argues that many of the conditions that preceded the 1929 crash are showing up again in today’s market. For example: rampant speculation, easy credit, investor access to previously reserved asset-classes, and what he calls “a sugar-rush or gold-rush” boom in AI and tech.
One headline from Business Insider summarises it perfectly: “7 bizarre ways the stock market was completely different in 1929 compared to today”. So we’re not talking identical conditions — we’re talking echoes, echoes with a modern twist.
My expert analysis: where we align & diverge from 1929
Here’s the crux of what I’ve concluded based on my years in [Insert Your Niche] that many overlook.
Similarities worth worrying about
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Speculative mania: In 1929, ordinary investors were borrowing heavily (10× margin) to load up on stocks. In today’s world, yes, margin rules are stricter — but we’re seeing massive flows into AI/tech and alternative assets, often under loose regulation.
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Democratization of access: Back then, it was brokerages on street corners in New York; today it’s apps, internet platforms, private-equity and startup access opening up to retail. Sorkin warns this removes guardrails.
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Regulatory retreat / risk build-up: The 1929 era lacked disclosure, margin controls, a functioning regulator. Today we have frameworks — but Sorkin argues that oversight is eroding just as risk is rising.
Differences that give some cushion
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Technology & information: In 1929 most investors had no real-time information or trading apps. Today, transparency is far higher, trades move faster, and regulators at least exist.
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Global regulation & markets: The global financial infrastructure is far more robust. We have circuit breakers, financial stress tests, margins, disclosure frameworks that simply didn’t exist in 1929.
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Nature of underlying assets: The tech/AI sector is inherently different from the radio, utilities and trust-companies of the 1920s. Innovation can justify premium valuations — but the risk is whether the payoff will match expectations. Sorkin expresses caution here.
My prediction
Here’s what I believe will play out over the next 12-24 months:
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The market will not necessarily crash tomorrow, but I expect a sharp correction (≥ 20 %) in those sectors that have risen most on hype (especially AI/tech).
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The institutions will start pulling back risk before retail does; that could steepen a downturn once sentiment flips.
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The last phase of the cycle will be not once-over leveraged margin calls (as 1929) but asset-reallocation and withdrawals from over-valued segments into safer havens (bonds, cash, non-cyclicals).
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When the correction hits, the narrative won’t be “we were wrong about AI” so much as “we mis-priced the timing and scale of payoff” — which is arguably worse from a risk standpoint.
In short: we’re not in doom-mode yet, but the risk of when this cycle turns is now materially higher than most believe. My vantage is that investors should be shifting from “how high can this go” to “what happens if it reverses”.
What you must do now — actionable steps
Here are three (actually four) immediate moves I recommend to every investor reading this:
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Stress-test your portfolio for a 20-30 % drop. Identify which holdings are premium priced based on expectations rather than fundamentals.
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Reduce exposure to assets with weak earnings justification yet high multiples — especially where driven by “fear of missing out”. Replace part of that with defensive positions (cash, bonds, dividend-stable companies).
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Lock in gains on speculative positions. If a holding has doubled/tripled based on hype, take home part of the windfall and leave your “hope” position with one-third or less.
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Increase liquidity & optionality. Make sure you have the dry powder to act on opportunities when the correction arrives — most gains are made in the downturn, not just the upside.
Why this matters to you
If you’re reading this blog because you care about preserving and growing capital, you should care deeply. The stakes today may not be identical to 1929 — but the psychology, the financial leverage, and the speculative mania have uncanny similarities. My years of working in [Insert Your Niche] tell me — conditions that evolve slowly end in swift reversals. You have time to prepare; don’t treat this as business-as-usual.
References
https://www.businessinsider.com/stock-market-crash-1929-vs-today-sorkin-nyse-great-depression-2025-10
Disclaimer
The information presented in this article is for educational and informational purposes only and should not be construed as financial, investment or other professional advice. Always perform your own due diligence and consult a qualified adviser before making any investment decisions.
Copyright:
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