Behavioral finance has long studied this pattern. Recency bias tells us to expect the future to look like the recent past, so investors project more gains. Overconfidence bias convinces them they have special insight, when in reality they are simply riding a wave that eventually breaks. In 2021, retail traders lived this cycle in real time. They made fast profits in meme stocks, then rolled those gains into even riskier corners of the market, certain the rally would never end. It did. The lesson is simple b ...