Know Financial History - It Can Save You a Lot of Pain!

Investing Tip #10

It’s been said that a bull market is like love. When you’re in it, you don’t think there has ever been anything like it before. Billionaire Bill Gross, considered by most on the street to be the best bond investor in the world, has said that if he could only have one textbook out of which to teach new investors, it would be a financial history book, not accounting or management theory.

Think back – the South Sea Bubble, the Roaring 20’s, Computers in the 1960’s, the Internet in the 1990’s. There is a marvelous book called Manias, Panics, and Crashes: A History of Financial Crises that I highly recommend. Had many investors read it, it’s doubtful that so many would have lost substantial portions of their net worth in the tech meltdown.

As Santayana said, “Those who don’t know history are doomed to repeat it”. We couldn’t have said it better ourselves.