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The Rhymes of History

October 12th

What we learn from history is that people don't learn from history.

Warren Buffett

The patterns of financial markets reveal a seemingly unending cycle of greed, panic, and subsequent regret. Despite the clear lessons offered to us, we often stubbornly persist in the belief that "this time it's different."

Our predisposition to be swayed by our emotions—greed and fear—is a considerable part of the problem. This emotional sway often takes precedence over rational decision-making, leading us down a dangerous path. The allure of quick wealth can make us discard the lessons of the past, despite their value.

A lack of historical knowledge or understanding can also be a stumbling block. Recognizing patterns, understanding the causes and consequences of bubbles and crashes, and taking these lessons to heart in our investment strategies, is critical. If these elements are overlooked, we may find ourselves repeating the same mistakes, time and time again.

In investing, as in life, the challenge is to learn from history. Remember, history might not repeat itself, but it often rhymes. And being attuned to these rhymes can keep us from dancing to a tune that leads us off a cliff.

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