On Saturday, Sept. 13, 2008, I should’ve been watching college football on television. I wasn’t.

I was glued to CNBC as the events unfolded surrounding whether or not Lehman Brothers, one of the nation’s largest and oldest investment banks, could be saved from failure. By Sunday, Sept. 14, all options were exhausted, and the news hit the tape that Lehman Brothers, after being in business for nearly 160 years, would file for bankruptcy and cease to exist as a viable entity.

The markets braced for impact on the open Monday. “It’s gonna be bad.” I told my wife as I stared at the television. “Oh, you’ve said that before,” she replied. “No,” I continued. “Truly bad. Great Depression bad.”

On Monday, Sept. 15, 2008, the Dow Jones Industrial Average (DJIA) fell 4.4% for the day.

And it wasn’t just Lehman. Merrill Lynch was hanging on by its fingernails as its balance sheet began to fester thanks to the toxic assets — mainly commercial real estate and subprime mortgages — the company was holding. Luckily, Bank of America (NYSE: BAC) swooped in and rescued America’s best-known retail brokerage franchise.

The next day, the federal government announced that it was bailing out insurance and financial giant AIG (NYSE: AIG) to the tune of $85 billion in the form of a two-year loan, making Uncle Sam an 80% equity holder in the firm. Later, terms of the deal were revised to the government purchasing $45 billion in AIG preferred stock with TARP (Troubled Asset Relief Program) funds and the Federal Reserve purchasing $52.5 billion in mortgage-backed securities, which allowed the troubled insurer to unwind its soured credit default swap book in an orderly fashion.

#-ad_banner-#Why was Lehman allowed to fail but not Merrill or AIG? That has been debated for the last decade.

As a professional observer and participant, I’ve come to the conclusion, which was also that of former Fed chairman Ben Bernanke, Lehman wasn’t savable because there was no decent underlying business to lend against.

The government wasn’t involved in the B of A/Merrill deal. However, B of A saw, rightly so, an attractive and valuable brand in Merrill Lynch. While AIG was an absolute train wreck, there was a steady, dependable revenue stream from its insurance business. Also, AIG did pose a much larger systemic risk than Lehman based on the heft of its insurance and asset management business.

While Lehman was gigantic, at the end of the day, its core business was proprietary trading and investment banking and underwriting. An AIG failure was much more likely to infect the whole system.

Ten years ago, the market saw it a different way.

The market and the economy took a nasty swan dive that included a painful bear market and 10% unemployment at the peak of the recession.

What a difference a decade makes.

After fits and starts, the economy has enjoyed one of the longest recoveries on record. After bottoming in March 2009, the S&P 500 has delivered an average annual return of 14.8%.

On Oct 16, 2008, Warren Buffett wrote a New York Times (NYSE: NYT) op-ed titled “Buy American. I Am.” As markets continued to tumble, critics lambasted the billionaire. I think the Oracle of Omaha has been vindicated.

A decade allows plenty of time for reflection. Is the banking system in better shape? The Dodd-Frank act and attached Volcker rule, which was signed into law in 2010, stiffens capital requirements for commercial/depositary banks and prohibits them from proprietary securities trading.

TARP, while well-intentioned, didn’t work out like it was supposed to. The government was authorized to “lend” up to $700 billion to banks to stimulate consumer and business activity. The actual number ended up being much less, totaling $426.4 billion. By 2014, the government had recovered $441.7 billion, resulting in a $15.3 billion profit for taxpayers. Initially, institutions were tight-fisted with the funds willing to lend only to individuals and businesses with the strongest balance sheets who typically don’t have a need to borrow. However, commercial and consumer lending has ticked up recently as the economy has gained some momentum.

So, the U.S. economy is healthier. Our financial system is in better shape. Markets are up. Everything is hunky dory. Can’t happen again, right?

Don’t bet on it.

Since the Founding Fathers said “Hey, this America thing is a GREAT idea!”, the U.S. has experienced some kind of financial panic, crash, or bear market every 12.1 years on average. Are we good until 2020? Who knows? But here are three takeaways I’ve gleaned from the last decade.

—     Quality is king. As previously discussed, Lehman was no longer a viable business. The firm took crazy risks with its money and misled investors and the market with accounting tricks. They were legal tricks, but deceptive nonetheless.
Prices may rise and fall. But a good and viable business, bought at a reasonable price will continue to deliver value.

—     Liquidity, liquidity, liquidity. The hallmark of the 2008 Financial Crisis was a sudden lack of market liquidity. Lehman and other banks had too much leverage and not enough cash. They also owned weird, esoteric, hard-to-trade investments that were hard, if not impossible, to sell. As an individual investor, don’t do that. Keep dry powder (cash). Don’t own some weird, triple inverse, Malaysian small cap ETF, especially if you don’t understand it. When markets get ugly, no one wants to buy that crap. If you need to get liquid, it’s easier to do so with widely held names like Coca Cola (NYSE: KO) or Cisco Systems (NASDAQ: CSCO). You may not get the exact price you want, but you will be able to sell it.

—     Beware the fad. From 2000 to 2007, the U.S. went real estate crazy. Buy a house with nothing down! Be a rental mogul! The commercial market did the same thing. Wall Street got in on the action. It ended badly. What’s the next ticking time bomb? Algorithmic trading? Cryptocurrency? The next, next big tech thing? When everyone’s talking about that kind of stuff, avoid it. If you got to the party early and made money, ease away from the table.

I would suggest, if you have the time, to read “Extraordinary Popular Delusions and the Madness of Crowds” by Charles Mackay. It will put everything into perspective. No one has a perfect black box. No matter how advanced processes seem to be, no matter the safeguards that have been put on the system since “the last time”, whenever humans and money are put together on a large scale, things can get weird.

Hopefully, each time we can emerge scarred but smarter. Maybe.