I was reminded this week of the importance of history by one of the best financial writers today. Jason Zweig writes the Intelligent Investor column at the Wall Street Journal where he consistently weaves history lessons into common sense investing advice.
This week, he published two transcripts from speeches he gave back in 1999 and 2001. Both speeches show why there’s a need to learn history and how you should use it.
I’ll only highlight one here. The second is linked below.
the real lesson of the late 90s mania and the 2000 massacre is that certainty is every investor’s worst enemy. The only universal truth that the past offers about the markets is that they will surprise us in the future. And the corollary to that law is that the markets will most brutally surprise those who are most certain what the future holds.
it’s the human lessons of history that can help vaccinate your common sense against the plagues of stupidity that ripple through the stock market every few years. – Fat Tails, Thin Ice
The ability to look back at a tiny moment in time to learn something about people’s thoughts, views, and behavior around events isn’t used enough.
Take the time to read both. And if you’re not already, I’d recommend reading his personal site since it’s probably the most underrated investing blog resource online. Access to his archive of past works shouldn’t be passed up.
Last Call
- 1974 and 1999: History Turned Upside Down – J. Zweig
- The Problem With Alternative Investing – Morningstar
- Buyback Extravaganza – Investor Field Guide
- How Your Emotions Get in the Way of Smart Investing – WSJ
- Overpriced – S. Godin
- High Growth Countries No Sure Thing – L. Swedroe
- How Inflation Affects Stocks – Daily Reckoning
- What Mountain Climbing Can Teach You About Business – C. Richards
- Interview with Professor and Fund Manager Sanjay Bakshi – MicroCap Club
