One of the ex-Presidents of the United States, Harry Truman is believed to have said, “The only thing new in the world is the history you do not know.”
I was reminded of this while talking to someone. When I asked a question, he responded stating that, such a thing has never happened. What he left unsaid was, ” … hence it is not going to happen”.
There are two important issues with such line of thinking.
- While talking about history, we often forget that what has not happened so far can still happen some time in future.
- The history one is talking about has limitations. It is either the recorded history or the one that one has read about or seen. This is what reminded of Harry Truman’s statement.
There is almost nothing new, except that part of history that we have not read. This is especially true in things involving human nature and human mind. Some things do not change. These include our basic instincts and emotions.
Read as much as possible about the history.
Investment is closely related to how one behaves rather than which is the best investment option or whether the timing is correct. If human emotions have not changed over the millennia, it makes life easy – just read.
This is exactly the purpose why I read many books on investment history and wrote “Riding The Roller Coaster – Lessons from financial markets we repeatedly forget”.