Some time ago, I got a small book by chance. I read it all in one breath, and read it a second time quickly. After reading it, I can’t help but feel very emotional. On the one hand, I feel really unfortunate. I only read this masterpiece when I was in my forties. Not to the point, but violent and violent.
The book is “Lessons from History” and the author is the famous American scholar Will Durant and his wife. Durant is well-known. It took more than 50 years to author the book “History of World Civilization”, which is a universally recognized classic handed down. He is known as “The Records of the History of the 20th Century, and the “Li Sao” of Human Civilization.” Considering the huge volume of “The History of World Civilization”, the Durant and his wife wrote “Lessons of History” on this basis, and made an exquisite exposition on some grand themes in human history by way of outline and guidance. These topics include geography, biology, race, character, morality, religion, economy, socialism, government, war, growth and decline, and human progress, etc. In the face of these magnificent themes, the author is able to control it with ease, and his writing is beautiful and convincing. It can be said that the historian’s wisdom is shining everywhere.
As stated in the preface, this book is not very large, but it reflects the author’s profound academic background in his long-term study of history. It is not so much a book of historical experience as it is a philosophical reflection on human history, involving some basic issues of human society.
The incisive expositions and golden sentences in the book are amazing, so I will not list them one by one here. What I want to talk about here is what I have experienced from the author’s text, the outstanding qualities of a historian.
The first is humility. The history of human society is complicated and even erratic. Whether it is the past, present, or future, it is full of various possibilities. The author frankly said, “Most of history is speculation, and the rest is prejudice.” “Historicists are always simplistic. They hurriedly select a small part of facts that are easy to deal with from a large number of people and events. However, we have never been able to tolerate and understand the intricate nature and events.” “We deduce the future through the conclusions obtained from the past, but due to the intensification of changes, this behavior is more risky than at any time in the past.” It is emphasized that we “must start with local knowledge and must temporarily accept all possibilities.” “All formulas should be questioned.” Only in this way can we “learn enough from history to bear the reality patiently and respect each other’s differences.”
It may be easier for those who read history to maintain a humble attitude and avoid idealized conceit.
The second is rationality. Humans are emotional animals, but history cannot tolerate too many intuitions, even good intentions. “The laws of biology are also the lessons of history. We are governed by evolution, and we are also tested by the laws of survival of the weak and the fittest in the biological world.” “The first lesson biology has given to history is that life is competition.” Competing groups have the same characteristics as competing individuals: insatiable, aggressive, arrogant, and arrogant.”
Regarding war, Durant said, “War is a country’s way of foraging.” Regarding inequality, Durant said frankly, “Inequality is not only natural innate, but also grows with the complexity of civilization…Life and history do exactly this, with arrogant injustice…Nature has no effect on the freedom in our dreams. I laugh at the union with equality. Because freedom and equality are eternal enemies.” “Only people whose economy can be below average will crave equality, and only those who are highly intelligent will crave freedom.” Yes, rationality is the kind of rationality that is heart-wrenching but irresistible.
It is objective again. Historical research cannot tolerate too much subjective will, because there are too many historical facts to face. For example, regarding wealth concentration, Durant concluded that “wealth concentration is natural and inevitable, and it can be cyclically alleviated through violent or peaceful partial redistribution.” “All economic history is the same. The slow heartbeat of this social organism. The concentration and forced redistribution of wealth are his huge contraction and expansion movement.” As for socialism, Durant was so unhurried: “The struggle of socialism against capitalism, It is part of the historical movement of wealth concentration and wealth dispersion. “If we don’t define socialism and capitalism as narrowly as Marx did, neither socialism nor capitalism is a new story. Broadly speaking, the history of capitalism is almost as old as that of mankind, and “in the course of thousands of years, more than a dozen countries have had socialist reform experiments.” In 2100 BC, the Sumerian economy was organized by the government. Management, “tens of thousands of clay tablets containing these contents were discovered.” The Hammurabi Code once stipulated the wages of herders and craftsmen, as well as the cost of surgeries for doctors. In the Ptolemaic dynasty of Egypt, the country owned land and managed agriculture. The farmer was told which land to cultivate and what crops to grow; his harvest had to be measured and registered by scribes appointed by the government. Both Wang Mang’s New Deal and Wang Anshi’s Reform can be regarded as socialism in different eras.
Regarding good and evil, “Nature and history do not agree with our concept of good and evil. They regard the fittest who survived as beauty, and the losers and the eliminated as evil. The universe is also impartial to Christ and Genghis Khan. , Treat them equally.” The
fourth is openness. History will not be rigid, but full of dramatic and unbelievable, even unthinkable. History is often “a master of humor unmatched”. History will never be boring. Historical serials are full of conflicts and never end. When talking about Marx, Durant believes that “he may have also underestimated the role of non-economic incentives in mass movements.” For example, religious fanaticism and mass emotions. “History laughs at all attempts to force it into theoretical paradigms and logical norms; history is a general reaction to us, he broke all the rules; history is a freak.” History has repeatedly proved that there are many possibilities in society. . In-depth study of history can heal “a tendon”.
The last point, I call it old. History has witnessed too many ups and downs, reincarnation of rise and fall. Taking the form of government as an example, monarchy, aristocratic politics, democratic politics, and dictatorship take turns in battle, and there is no absolute advantage or disadvantage. The accumulation and dispersion of wealth, war and peace, all cycle endlessly. “Civilization will go through the process of growth, prosperity, decline, and extinction.” “Neither individuals nor countries have the right to demand that life be eternal and immortal. Death is natural, and if death comes at the right time, death is possible. It is forgiven and beneficial.” “We cannot require progress to be continuous or universal. It is clear that just as individual development has periods of failure, fatigue, and rest, recession is a normal thing. “If you
study history, you won’t be surprised and worry about gains and losses. There are not so many universal truths. If you mature a little, it may not be forever before you.
Enlightenment of investment
As a professional investor, I would like to say that the above qualities are of great benefit to investment, and even indispensable. Shouldn’t investment be modest and prudent, rational and objective, maintain an open mind, and watch the world change with cold eyes? Not should, but must. Otherwise, the market’s face-slap is faster than anyone else, and even harder than anyone else. I believe investors over forty years old will agree with this sentence without further explanation. For younger, conceited and successful investors, there is no point in explaining more. So I won’t repeat it.
”The present is the past that was picked up for the sake of success. The past is especially the unfolding of the present.” Like investment, history is “an art and a philosophy-an industry that collects facts, and an industry that combines chaotic materials. Art arranged in a meaningful way, a philosophy that seeks foresight and enlightenment.” People often say that “investment is the realization of cognition”, which is probably what it means.
Investment is a unique behavior of human society. The world of investment is only a narrower and more professional society. This society reflects the essence of human behavior shown in all human history, because human nature remains unchanged.
In investment activities, in the face of a prejudiced past and a highly uncertain future, “Lessons from History” can give us too much enlightenment: enterprises compete fiercely like all lives; the winner is the king, the loser is the invader; Leading companies and Diaosi companies are likely to continue to diverge-so the trend may indeed be right; history has also witnessed the decline and death of leading companies and the counterattack of Diaosi companies-so the mean return is also true; the monopoly and manipulation of the strong It is likely to continue, or it may be suppressed; new monopolies are bound to emerge; the balance of supply and demand is only an accidental and unstable balance, and the imbalance of supply and demand is the normal state of the market. Enterprises will always face challenges from internal and external environments. The key depends on whether the enterprise has the initiative and creativity to respond effectively to new situations; any enterprise and industry will experience the cycle of ups and downs; traffic is very important, because nature is extremely Favoring quantity and quantitative change are the prerequisites for qualitative change; social consensus will change, and morals will often change; if religion is borrowed, many of the falsified stories in the capital market are not worthless, they give poor knowledge and desire The comfort of a wealthy soul and cheap…The enlightenment that the philosophy of history can give investment is too numerous to list.
Finally, since history is full of incredible and even unthinkable, then how to use DCF for valuation? Adopting mid-term thinking, openly admitting uncertainty, boldly assuming and carefully verifying, and openly predicting and responding prudently is a more pragmatic attitude than the so-called long-termism and historical nihilism (see the picture party) .
I believe that when my mind is full of lessons from history, I can be “selfless” and look at the world of investment in another way.