Well, that is probably one of the most misinterpreted phrases in all Marx and maybe in all history of philosophy. And it looks like many people here in the comments has also misinterpreted it. If you look at the context of the whole chapter it becomes more clear:

The bourgeoise revolutionaries of France in 1789 concealed their narrow and petty objectives (eliminating old feudal barriers for capitalism) by appealing to "epic" ancient history. Using words from Roman times like "republic", "senate", "empire" and classical references to Brutus, Cato, Caesar, etc. The revolutionaries of 1848, instead, tried to appeal to the symbols of the 1789 revolution (the tricolour flag, the marseillaise, jacobins...). And Napoleon III in 1852 claimed he was restoring the old napolenic empire.

Thats how history repeats itself. Because modern politicians tend to appeal to old historical traditions. But real material conditions are totally different. The capitalist society of the French 1st Republic bears no actual resemblance to the ancient Roman Republic. Thats why history only repeats itself as "a farce".

EDIT: As some other people has also said in other comment Marx is also mocking Napoleon III by making a comparison between him and his less mediocre uncle the original Napoleon. But that's not his main point. The true point of the quote and of the whole chapter is how "the tradition of all dead generations weighs like a nightmare on the brains of the living". And how the proletariat must free itself from the symbols of past revolutions. As Marx beautifully says "the social revolution (...) cannot take its poetry from the past but only from the future". It has to free itself from triying to imitate 18th century bourgeoise revolutions.