STUDY HISTORY
“History does not repeat itself but it does rhyme.” Mark Twain
“So why study history? We study history not to know the future but to widen our horizons, to understand that our present situation is neither natural nor inevitable, and that we consequently have many more possibilities before us than we imagine.” Yuval Noah Harari
"History repeats because of the weakness of human nature." William D Gann
“The more ‘hindsight’ the better foresight.’ Dickson G Watts
“A favorite theory of mine is that no occurrence is sole and solitary but is merely a repetition of a thing which has happened before, and perhaps often.” Mark Twain
"What we learn from history is that people don't learn from history. And you certainly see that in financial markets all the time." Warren Buffett
“The truth is, history can be one of our greatest aids, in investing as in life.” Howard Marks
“I learned to study history better." Ray Dalio
“History is one of my favorite things” Li Lu
"In order to do well, you must learn from the past." Roy Neuberger
"One thing all of us have learned is never ignore the lessons of history." Paul Tudor Jones
"I read a lot of financial history and studied human nature." Thomas Gayner
"I read a lot of history and it’s my thing on not just financial history but broad history." Jim Chanos
"As I look back on it now, it's obvious that studying history and philosophy was much better preparation for the stock market than, say, studying statistics." Peter Lynch
“There is no better teacher than history in determining the future... There are answers worth billions of dollars in a $30 history book.” Charlie Munger
"The unhappy truth is that markets don't learn their lessons very well. Financial history tends to repeat itself. The only questions are when and to what degree." Michael Lewitt
"No statement is more true and better applicable to Wall Street than the famous warning of Santayana: 'Those who do not remember the past are condemned to repeat it.’'' Benjamin Graham
"History may not repeat itself, but some of its lessons are inescapable. One is that in the world of high and confident finance little is ever really new. The controlling fact is not the tendency to brilliant invention; the controlling fact is the shortness of the public memory, especially when it contends with a euphoric desire to forget." John Kenneth Gailbraith
“A history degree is far more useful than a CFA [Chartered Financial Analyst].” Crispin Odey
"I think an investor today could learn a lot by seeing what the environment was like when there was less competition and when securities were of different kinds of companies, and to understand the cycles of history. The eras pass and change but the fundamental principles don't." Seth Klarman
“To few investors appreciate or even care to know the lessons of financial history.” Chris Bloomstran
“I believe that one of the most important lessons for those who did badly in 2008 is to have a ‘timeless and universal investment’ perspective, which means to broaden your perspective to understand what happened in long ago times (e.g., in the 1930s) and faraway places (like Japan and Latin America).” Ray Dalio
“You can’t understand economics without understanding philosophy and history.” Leon Levy
"[Super-smart people with all these degrees in higher mathematics end up doing these dumb things as they] have a lack of understanding of history. One of the things — in 1962, when I set up our office in Kiewit Plaza, where we still are, it’s a different floor, I put seven items on the wall. Our art budget was $7, and I went down to the library, and for a dollar each I made photo copies of the pages from financial history." Warren Buffett
"History is important." Sir Michael Hintze
“As investors, we are studying history to try to predict the future.” Yen Liow
“[I’m] someone who’s a student of financial history… I’ve studied the history of finance so much.” Bill Gurley
"You can always learn accounting on the side, but you've got to study history. History gives you a broad perspective and teaches that exceptional people can make a difference." Shelby Davis
"At least a portion of Windsor's critical edge amounted to nothing more mysterious than remembering lessons of the past and how they tend to repeat themselves. You cannot become a captive of historical parallel, but you must be a student of history." John Neff
“I went into business after completing my doctoral degree in history. My relative advantage as a businessman was to be able to translate an understanding of history onto the present and financial markets, which gave me the opportunity to be unusually successful at being able to predict things.” Thomas Kaplan
“I met Charlie Munger in my USC graduate school investment class and had the opportunity to ask him this important question, 'If I could do one thing to make myself a better investment professional, what would it be?' He answered, 'Read history! Read history! Read history!' This was among the best pieces of advice I ever received.” Bob Rodriguez
"There are a lot of people in the financial markets who do not even know there is such a thing as history. They think financial markets were invented the day they showed up at Merrill Lynch or Deutsche Bank of wherever, and these people make fortunes.. For me history is important. To be a long term success in financial markets you must understand history. The long term success stories are those who know history either from experience, reading or just understanding how markets work." Jim Rogers
“Prudence suggests that he [the investor] have an adequate idea of stock market history, in terms, particularly, of the major fluctuations in its price level and of the varying relationships between stock prices as a whole and their earnings and dividends. With this background he may be in a position to form some worthwhile judgment of the attractiveness or dangers of the market.” Benjamin Graham
"My advice to young people, if they really want to be successful in this business, is to learn financial history. Learn history in general and then dig deeper into financial history and you will not be in such awe of everything that's going on. I see the same problem in my office. People just don't know any financial history and they think everything that is happening is unusual. Everything else can be learned on the job." Joe Rosenberg
“Those who don’t know history are doomed to repeat it.” — Edmund Burke … A popular song and a recent article in The Wall Street Journal reminded us of Edmund Burke’s quote and how important history is to the long-term success of common stock ownership. We pride ourselves in learning whatever we can glean from the history of the stock market, because we seek to avoid the mistakes from the past." Bill Smead
“Never stop reading. History doesn’t repeat but it does rhyme.” Seth Klarman
"I like reading about history, so I know that there always has been something to worry about (and always will be)." Francois Rochon
"Knowing market history is hugely important not because events repeat themselves exactly but because patterns of events and the way people who make up the market react can be typical and predictable." Frank Martin
"You have to have a liberal arts education and a sense of history and biology." Bruce Berkowitz
"Failing to understand the lessons of history more than anything is what dooms investors to be victimized repeatedly cycle by cycle." Howard Marks
"Warren [Buffett] stressed to me over and over how much studying business history has helped him." Alice Schroeder
"Expertise in any field is largely driven by a mental database of experience and patterns that are recognized by having lived through difficult environments. To us, studying history is very important." Jim Brilliant
"Nowhere is an appreciation of history more important than in understanding bubbles." James Montier
"[knowing] History and political science are valuable." Ralph Wanger
"I like reading history of all sorts and think it’s beneficial to investing." Allan Mecham
"Study the past. Become your own historian.” Roy Neuberger
“It’s extremely important to know history, but the trouble is that the big events in financial history occur only once every few generations. The latest global financial crisis began in 2008 and the one before that in 1929. That’s a gap of 79 years. So, while memory has the potential to restrain action and induce prudence by reminding us of tough periods, over time as memory fades the lessons fade as well.” Howard Marks
“While the lessons and warnings of history are clear if one looks for them, most people don’t look for them because most people learn from their experiences and a single lifetime is too short to give them those lessons and warnings that they need.” Ray Dalio
"To the open-minded and clear-headed student of history, it is a truism that defining moments in finance have a cyclical tendency and, in their essence at least, are rarely without a conceptual precedent." Frank Martin
“I went back in history and I saw these things happening before, for the same cause/effect relationships. And then I realized that everything, everything that happens is just "another one of those." Right. The same thing happens. It may be, I don't know, if you're skiing and you make a turn, that's called skiing, and make a turn and there is "one of those" and they repeat. How does reality work? What's the cause/effect relationship? So that if you're encountering "one of those" -- a learning experience, anything, a birth, a marriage, an economic downturn -- if you encounter any of those, they have all happened before. A deleveraging. So that's why we anticipated the deleveraging before the 2008 downturn in the economy. It's a very good example of what we're talking about.” Ray Dalio
“In terms of reading of financial history and all that sort of thing, I’ve always been absolutely absorbed with reading about disasters. And there’s no question, I mean, when you look at the folly of humans — you know, I’ve focused on the folly in the financial area — there’s all kinds of folly elsewhere — but just the financial area will give you plenty of material if you like to be a follower of folly. And I do think that understanding gave us some advantage over these people that have IQs of 180, you know, and can do things with math that we couldn’t do. They just — they really just didn’t have an understanding of how human beings behave and what happens. 2008 was a good example of that, too. So we’ve — we have been a student of other people’s folly, and its served us well.” Warren Buffett
"A systematic attempt to study past events to isolate cause-and-effect relationships - so as to apply them to gain a better understanding of the present - is more than simply worthwhile, it's obligatory. No two episodes are alike, but there is often a common thread or two woven through them." Frank Martin
"My theory and practical application have proved to my satisfaction that nothing new ever occurs in the business of speculating or investing in securities or commodities." Jesse Livermore
"I hate that they don’t teach financial history in business schools. If it was up to me, I would make financial history and all history a number one requirement for business schools. Understanding how a spreadsheet works can be learned on the job pretty easily, but understanding the continuum of history requires certain intellect. I cannot for the life of me understand why business schools are not teaching financial history." Jim Tisch
"Contributing to . . . euphoria are two further factors little noted in our time or in past times. The first is the extreme brevity of the financial memory. . . . There can be few fields of human endeavor in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present." John Kenneth Galbraith
“Economists see themselves as trained in economics and are reluctant to get involved in sociology, psychology, anthropology, or history. In fact, at this point in history, the economics profession is not very interested in learning history. If you’re going to be involved with forecasting, you have to use every available perspective to stay in touch with reality.” Robert Shiller
"I think to take the next step and be a portfolio manager you need both a sense of history and a vivid sense of risk." Seth Klarman
"We surely need not be reminded that history is a tool, relevant apart from the classroom setting, that actually has practical utility - like a head is more than just a hat rack. History is a teacher in the abstract for those who want to apply it to the future." Frank Martin
"The amazing thing is that people just don't seem to learn from history." Bruce Berkowitz
"I believe that awareness of history, in particular, economic history, financial history, history of how technological improvements and technological breakthroughs have impacted the world, and history of geography are important, so I think some history books are a must." Charles de Vaulx
"Where I got a lot of my education from was reading history. I'd go back and read about Edison, Ford, Rockefeller, J.P. Morgan. The period between 1870-1920 is really interesting." Marc Andreessen
"It is my belief that one constant in the stock market is human nature. For this reason, while I do not believe history provides a precise blueprint for the future, I also do not believe that those who blithely ignore history will have much success understanding the present." Michael Burry
"I'm a student of history of the financial markets. I think there is a lot to be gleaned there. It's not a cutting edge piece that gives you the most information, its respecting other periods that have similarities. No two crisis look the same, so don't expect the last one to hit next time." Jeffrey Sherman
“We are also students of financial history, convinced that a repeating mechanism is at work in the markets. We acknowledge the rise and fall of civilizations and the ebb and flow of the business cycle.” Chris Bloomstran
“What I believe is everything happens over and over again through history. [The] World operates like a machine and happens over and over again. If you can sort of go above yourself and your circumstances and look down at yourself within your circumstances, within a historical perspective, and then have agreed upon principles, principals are how to handle things that happen over and over again. By having that it’s helpful, it allows you to have an independent point of view, while not being 100% certain but to be defensive.” Ray Dalio
"My passion for ancient history and archaeology also gives me perspective. My interests in the ancient world have given me insights into the modern world. Investigations into antiquity reveal the extraordinary degree to which politicians and financiers are repeatedly able to fleece civilians when things go wrong." Leon Levy
"A good habit is to know the history of our civilization. It will help in identifying what are probably fads in the markets. The phrase ‘this too shall pass away’ applies to many “trends” in Wall Street." Francois Rochon
"Everybody always stresses the importance of learning from history: "Those who don't learn from the mistakes of the past are doomed to repeat them," the saying goes. In my experience, most people heed this advice, but only up to a point. They study the past quite closely and glean as many lessons from it as they can. But they almost never look back far enough. They confine themselves to the history of the previous few years or perhaps a decade or two. In other words, it's not that people don't learn from the past. They do- but only the recent past. And that can be a deadly error." Scott Fearon
"If you're limiting yourself to what you experienced, you are going to be in trouble... I studied the Great Depression, I studied the Weimar Republic. I studied important events that didn't happen to me." Ray Dalio
"Markets are always a puzzle, and the future of economies and financial markets is always sheathed in dense clouds which teasingly part for only brief glimpses of what may lie beyond. One is always looking at history for clues to the future, and at other data and logic to attempt to fit the puzzle pieces together to create a plausible view of what that future may bring." Paul Singer
"Though the institutions of society have difficulty learning from history, individuals can do so." Ed Thorp
"I’m sorry I didn’t read more history. Things always repeat themselves. History is a great teacher. It’s a great lesson for the future. You can go back and learn a lot from history. I’m sorry that I took the route of not having as many courses in the arts and humanities and history as I would liked to have." Henry Kravis
"One of my favorite quotes, paraphrased, is ‘Those who cannot remember the past are condemned to repeat it’ by George Santanya." Sam Zell
"Looking back on history is an invaluable way to learn how to analyze trends. And better still, it teaches you how to anticipate future changes." Jim Rogers
“I think the biggest mistake you can make is to ignore the repetitive nature of the cyclical pattern. In his book Principles, Ray Dalio talks about how much analysis he and his partners did, the conclusion of which is the ability to look at what’s going on in the world or in the market and say, ‘Oh, that’s another one of those.’ Life becomes very easy when you have studied the past to the extent that you have seen the recurring patterns and you can recognize them when they come up again. So I think that’s extremely important. But, the other thing is – and I think the guiding quote of the book is another one from Mark Twain, ‘History does not repeat, but it does rhyme.’ History does not repeat. The cycles are never the same in terms of amplitude, speed, duration, cause, or ramifications, but there are themes that repeat that can help us to identify and properly respond to cyclical occurrences.” Howard Marks
“Over the last year, I have been studying economic and market moves in major countries going back to about the year 1500, which has given me a superficial understanding of them. With that perspective, I can say with confidence that throughout the times I have studied the same big things happen over and over again for essentially the same reasons. I’m not saying they’re exactly the same or that important changes haven’t occurred, because they certainly have (e.g., how central banks have come and gone and changed). What I am saying is that big paradigm shifts have always happened and they happened for roughly the same reasons.” Ray Dalio
“I think history is really useful for investing because I think one of the mistakes you can make as a sort of temporal elegance of thinking the time one lives through it's sort of overly unique.” Charlie Songhurst
“Charlie Munger reminds all of us investors to read history, then read some more history, and then re-read it all again.) The actors (stocks) always change, but the market script of greed and fear cycles doesn’t.” David Rolfe
“It's important to have historical perspective. I have this hobby where I like to read old newspapers. At any given time there are a lot of things that at that moment seem very important and deserve to be on the front page, but with the benefit of hindsight you see that a lot of those things that were supposedly very important don’t turn out to be important at all.” Murray Stahl
Further Reading:
‘Study History’, Investment Masters Class. 2016.