Brothers, the financial market is basically just repeating the same cycle over and over again: Money gets cheap, everyone gets optimistic. Optimism lasts, leverage builds up. Leverage increases, bubbles form. Bubbles burst, credit contracts. Finally, policies step in to save the day, the market recovers, and then the next cycle begins. It seems like every crisis has a different name. Sometimes it’s real estate, sometimes it’s tech stocks, sometimes it’s banks, and sometimes it’s crypto. But the underlying logic is very similar: When credit expands, risks are underestimated. When credit contracts, risks are repriced. When money is easy to borrow, people think they’re geniuses. Assets go up, confidence grows, collateral values rise, so more people take on leverage, more money chases assets, and prices keep climbing. This is when you often hear one phrase: “This time is different.” But this is also where the real danger lies. When the market starts to believe that risk has disappeared, that’s usually when risk accumulates the fastest. When interest rates rise, cash flow worsens, and asset prices fall, the entire logic flips. Before, rising asset prices supported borrowing; later, falling asset prices shrink credit. Before, leverage accelerated gains; later, leverage accelerates losses. Before, everyone wanted to buy; later, everyone wants to sell. So for regular people, understanding the financial cycle isn’t about perfectly predicting the peak or always selling at the top. What’s truly useful is knowing: During booms, don’t think you’ll never lose. During bubbles, don’t mistake rising prices for skill. During crises, don’t mistake panic for the end. During recoveries, don’t let recent losses stop you from participating again. The hardest part of investing isn’t understanding the cycle, but controlling your actions within the cycle. When credit expands, don’t leverage yourself to the point where you can’t handle it. When credit contracts, don’t panic and sell off all your long-term assets. The market will always cycle. But with every cycle, those who forget risk during the most optimistic times and forget opportunity during the most pessimistic times will be eliminated.