Learning From History

By Al Thomas

What can I possibly learn from something that is old and in the trash can?

When a person becomes a historian he begins to see the repeat of events. Why? Because the basic psychology of man repeats. When we learn these cycles we then can have a better understanding of what will happen next.

Most of the prognosticators of almost any subject are what I call “in-the-rearview-mirror” predictors. The look at the immediate past and assume the near future will repeat. It is a straight arrow line of reasoning; it does work – for a short time.

The shortness of it depends upon what it is being applied to. It may be a matter of weeks or months or several years. No single period may be applied to everything.

One must become a student of a particular subject. This will require analysis that could go back for decades depending upon what is being studied.

In the case of the financial markets there are many cycles and cycles within cycles. Those reported most of the time are relatively short term. Every reporter talks about the “presidential cycle”. The common bull and bear cycles of 16 to 18 years are rarely discussed. It is my opinion we are currently in the 16 to 18 year bear cycle that started in about 2000.

The bull cycle of 1982 to 2000 everyone made money. Since 2000 finances have been negative for most investors. Of course, within any cycle there are mini-cycles that are obvious to students of financial history. The media usually sees them too late near the end.

This same psychological application can be applied to various occupations and to the longevity of countries. Unfortunately democracies usually last about 200 years. The U.S. has run out its time path. When the “have-nots” are allowed to vote they eventually bankrupt their governments by demanding more and more free handouts that eventually cause the demise of the government. That is not Democratic or Republican. It is a historical fact.

A recent study by the Dent organization showed the rise and fall of the veterinarian industry. They showed the peak to have been 2007 when vets were making big money which attracted many to become vets. The attendance to vet school has increased by 20%. Yet the income to the vet clinics has declined since that time. Not a good period to choose this profession. Many occupations are tied to the economy and are predicable if historical data is applied.

Today everyone who can fog a mirror is a college graduate with nothing to show after 4 years and a mountain of debt but a piece of paper. The trade schools have been forgotten, Craftsmen of all types are disappearing.

Don’t look at what is the “hot job prospect” now. Study history to see what will be the skill required 10 or 20 years from today. The time period chosen will depend on your age.

A study of history will help guide a person to a successful career.

Al Thomas' new book, "If It Doesn't Go Up, Don't Buy It!", 3rd edition, Chapter Two shows in detail a method that made 400% during the 2000-2010 period with only 7 trades, no losses and paid no commission Read the first chapter at http://www.mutualfundmagic.com and Discover why he's the man that Wall Street does not want you to know. Copyright 2013 Williamsburg Investment Co. All rights reserved. Copyright 2013 Williamsburg Investment Co. All rights reserved.