Spotlight: Anti-Patterns from the History of Humankind

Anti-pattern is a field of study in software engineering, which is defined as the commonly occurring solution to a problem that generates decidedly negative consequences. History, including that of investing, should be studied using the lens of anti-patterns.

Benjamin Graham’s book The Intelligent Investor is one of the greatest investment classics. I know that you already know it but I wanted to write it again so that I don’t forget it. In the introduction of the book, Graham reminded us of the famous poet George Santayana’s quote, “Those who do not remember the past are condemned to repeat it.”

It’s not just a quote but a warning. Unfortunately, most people choose to ignore this warning. German philosopher Friedrich Hegel confirmed it when he observed, “The only thing we learn from history is that we learn nothing from history.”

The interesting thing about using quotes is that you can always find some wise words uttered by someone to prove your point. The two quotes that I used above were meant to highlight the importance of learning from history. To contradict it, let me tell you what Warren Buffett wrote in his 1991 letter to investors – “If history books were the key to riches, the Forbes 400 would consist of librarians.”

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