Without history, the investor is lost. Even with it, you have to be suspicious of what people say to you, even when they call them facts. More important, you have to be suspicious of what you say to yourself! As we said, the older we get, the less we know about anything; the more facts, opinions, and ideas we collect, the less sure we are of any of them.
Besides, we get more and more experience with facts that turn out not to be so.
A woman says she will be ready in five minutes. A teenager believes he has done his homework. And George W. Bush and Tony Blair may have actually believed that there were weapons of mass destruction in Iraq. Reason is slave to our wishes. Our minds work for our desires, not the other way around. “The brain is merely the heart's dupe,” said French writer and philosopher La Rochefoucauld.
But there are different kinds of facts. The little white lies we tell ourselves and each other to get through life gracefully are not the big, mass illusions of the public spectacle.
Global freezing—who can forget that? It was widely believed in the 1960s and 1970s that the planet was getting colder. When the oil shock of 1973 came along, “We will all shiver in the dark,” said the pundits. Then the oil price was supposed to go to $100 a barrel. Of course, it collapsed down to $10 a barrel and stayed there for the next 20 years. And then Dow 36,000 was just around the corner in the late 1990s. And, oh, yes, remember “The Great Crash of 2004”? This ...