Nothing succeeds like success. And nothing fails like excess.
That seemed to be the theme for global investor George Soros on Monday as he held forth in Bangalore on what he calls the "super bubble" of 2008 - when Wall Street banks crashed, triggering the world's worst financial crisis since the Great Depression.
Soros has made plenty of money in the market - including some from audacious speculation against the British pound. And that could be because of his belief that markets are imperfect, and move from extreme to extreme, creating bubbles that burst as countries swing through "virtuous" or "vicious" modes.
The 81-year-old Hungarian American was speaking to Anurag Behar, vice-chancellor of the Azim Premji University (APU), as part of the APU Public Lecture series.
"I have formulated a hypothesis for the crash of 2008 that it was the result of a "super-bubble" that started forming in 1980 when Ronald Reagan became US president and Margaret Thatcher was UK's prime minister," he said.
"The misconception…was the belief that markets correct their own excesses," said Soros, chairman of Soros Fund Management.
He said the "bubble effect" is more in the US and UK than in developing economies, especially India.
"When developed countries are facing one of the worst crises, developing countries and India in particular, show an aspiring phenomenon in the market and democracy," he said.
The investor, now a philanthropist as well, bases his views on a "theory of reflexivity" that stems from the ideas of Austrian-born philosopher Karl Popper.
"The present global financial crisis is more serious than the one the world faced in 2008. The reasons are the financial institutions, banking services, central banking etc were safe and on place in 2008. But now they are not safe when compared to the previous crises," Soros said.