“The idea that stock prices revert to a long term level.”

In other words, if there’s an exception to the rule, that exception eventually dissipates and the rule, for lack of a better way to put it, rules again. Think the bursting of the tech bubble in 2000.

Let’s take the concept out of the financial realm, and apply it to history, and paradigm changing upheavals in particular.

If you were born between 1950 and 1980, the first truly major upheaval you lived through was 9/11. However, your parents or grandparents went through WW1, the Great Depression, and WW2 within a time span of around 30 years. That was the norm. Your relatively calm existence was the historical anomaly.

Going back further, there’s the Civil War, famines and plagues around the world, the Crusades, gory revolutions galore, and other events that rocked the world of the people caught in those disruptions.

And yet for 50+ years, following the end of WW2, although we had Vietnam, Korea, assassinations of major figures, the Cuban missile crisis, et al., nothing, save the civil rights movement, changed the fabric of day to day life, and that was for the better.

But now the forces of history have given us, within a span of 7 years, two major upheavals, 9/11 and the current global financial crisis, which may well lead to social instability, and a day to day existence fraught with a level of anxiety that the boomer and post boomer generations have never known.

The placidity bubble has burst.  Back to normal.

History reverts to the mean. And the mean ain’t pretty.