There is nothing more quotidian than financial crisis. It is a phenomenon akin to the crosstown bus: if you missed the last one, just stand there. Another will be along in fifteen minutes.

Nor is any cycle of mania and crisis importantly unique, other than in its incidental details (tulip bulbs, dot.com stocks, subprime mortgages). They all follow a discernible pattern, as how could they not, for they are all manifestations of immutable human nature. And as observers from the author of the Book of Ecclesiastes to Harry Truman have told us, when it comes to human nature, there is nothing new under the sun.

The most elegant, scholarly, witty and in the end definitive analysis of the eternal cycle of financial mania and panic is the late Charles Kindleberger’s classic Manias, Panics and Crashes. It first appeared in 1978, and went through several editions during the author’s blessedly long life. (He died at 92 in 2003.)

The book is divided up into what the author perceived as the stages of the cycle, from speculative mania through monetary expansion to the emergence of swindles, then through national and even international contagion to the inevitable collapse and ensuing money panic, and thence to methods of resolution, ranging from letting it burn out to the function of the lender of last resort. Each of these sections becomes in itself a tutorial on the historic experience of that particular phase of the cycle.

Peter Bernstein wrote in his foreword to the fourth edition (in 2000) that “one never picks up a work of Charles Kindleberger without anticipating a feast of entertainment,” and this is exactly right. Even amid the rigor of specific historic detail, you’re never far from the drollery of Kindleberger’s skewering of the key actors in many of the crises -- as well as of some of his colleagues in the economics profession, with their occasionally bizarre readings of events.

This is the best work on the subject we will ever have, and one of a very small number of absolutely indispensable books for any investment advisor who is groping toward the realization that her primary task is to save her clients from themselves.

There is a sixth edition of Manias, Panics and Crashes available, with additional chapters on the 2008-09 experience by the emeritus University of Chicago scholar Robert Aliber. I have not read this, but advisors seem to prefer books that are “up to date” – even when the book’s central thesis is that nothing changes – so this is probably the edition you want to own.

©2014 Nick Murray. All rights reserved. Reprinted by permission. Nick highlights new books, articles and research findings in the “Resources” feature of his monthly newsletter, Nick Murray Interactive. To download the current sample issue, visit www.nickmurray.com and click on “Newsletter.”