Everyone says you should study financial history, yet what does that mean? It means that you have a sense of market extremes and their causes. It means that you have a sense of what can surprise markets and what creates uncertainty. Understanding history means that you appreciate that policymakers will make mistakes. It means that you understand the dynamics of the business and credit cycle. Without history there is no context. Knowing history is not the same as acting on history. Use history as a tool not just a lesson.
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