Amnesia

Jason Zweig writes the following in “The Devil’s Financial Dictionary”:

Wall Street suffers from many ailments also, but amnesia is foremost among them. By burying the past, the financial community can disavow any responsibility to learn from its own mistakes and can minimise the odds that its clients will be able to learn from other people’s mistakes.

In the above paragraph, “Wall Street” is representative of investors at large. That is exactly why in the “Introduction” chapter of the book I have written the following words:

Our memory is short-lived. I would strongly suggest you keep reading this book every year to keep your memory refreshed. (That is why we are printing this book in hardbound format).

#RidingTheRollerCoaster – 253

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Do we learn from history?

When Jeremy Grantham was asked, “Do you think we will learn anything from this turmoil?”, he responded, “We will learn an enormous amount in the very short term, quite a bit in the medium term and absolutely nothing in the long term. That would be the historical precedent.”

We have short memories. We need to be reminded regularly of the history, as a protection against our own mistakes during the extremes.

#RidingTheRollerCoaster – 177

Lessons we forget? Or we refuse to learn?

Couple of months back, we wrote about how past performance is (mis)represented by those who write in mass media. Very often, a single period data is taken to arrive at a conclusion. One feels sad for the readers.

Here is an article I had written in Mint in March 2016. Just a day later, a leading financial daily, Economic Times repeated the mistake I had referred to. I wrote a blog post about it, too. A couple of days ago, once again I came a cross a similar piece of reporting.

The reporter seems only to be interested in sensationalisation, for which he probably imagined a story and then found the data to justify. The problem with such reports are that they only does disservice to even the customers (readers, in this case) of the newspaper this reporter is representing. This is irresponsible behaviour.

It also appears the reporters do not want to learn.┬áMy book’s subtitle aptly captures a particular┬ábehaviour of most – “Lessons … we repeatedly forget.” In this case, it is more like “Lessons … we refuse to learn”.

Upton Sinclair has wonderfully said, It is difficult to get a man to understand something when his salary depends upon his not understanding it.God bless the readers!

 

#RidingTheRollerCoaster – 170