One of my favorite frameworks for thinking about investing and the economy is the simple yet profound concept that stability is destabilizing. This goes back to the ideas of the late economist Hyman Minsky . Minsky was not well known during his lifetime. His views on why an economy goes through boom-bust cycles only gained prominence after the 2008–2009 financial crisis. In essence, Minsky theorized that stability was itself destabilizing to an economy. I first learned about him — and how his ideas can be extended to investing — years ago after encountering a Motley Fool article written by Morgan Housel. Here is how Housel describes Minsky’s framework:“Whether it’s stocks not crashing or the economy going long without a recession, stability gives people peace of mind. And when people feel safe, they take more risks, such as taking on debt or buying more stocks. It must be pretty much
