Book Reviews | 12:17 PM
Investing in U.S. Financial History: Understanding the Past to Forecast the Future by Mark J Higgins.
By Rudi Filapek-Vandyck
“There is nothing new in the world except the history you do not know.”
These words spoken by former US President Harry Truman capture the essence of what makes a book like Mark J Higgins’ Investing In U.S. Financial History compulsory reading for every scholar of modern day financial markets.
As the book’s subtitle proclaims, understanding the past makes forecasting the future a whole lot easier.
This principle was yet again confirmed during my attendance at an investor presentation by one of the principals of Australia’s Future Fund.
Back in 2020, when covid forced societies into lockdowns and equity markets succumbed to a savage down draft, the Future Fund had taken money off the table, unsure about what might happen next, only to find itself scrambling to get back in as central banks swiftly moved to stabilise markets.
The lesson learned: if we’d had paid more attention to history, we’d probably have avoided putting ourselves in this situation.
There’s plenty to glean, learn and memorise from Higgins’ stroll through American finance history which, as the author would have us believe, reveals there is almost no financial event today that hasn’t ever happened before.
Higgins’ journey starts off with the 2020 global covid pandemic and its impact on economies and financial markets; also inspiring his own quest to write this book.
In 233 years, the United States of America evolved from a colonial territory of Great Britain to become the world’s leading and largest economy, and its most dominant financial centre.
Investing In U.S. Financial History explains how the early years were very much a wild west set-up, where investors were more at risk of losing their money rather than making more of it. But out of this shambolic situation have come the Federal Reserve and many products and innovations that underpin today’s vibrant finance sector worldwide.
From Alexander Hamilton, “America’s financial founding father”, to John Pierpont Morgan, Andrew Carnegie, Alan Greenspan, Ben Bernanke, and so many more; all appear as their role in shaping finance history becomes apparent.
Throughout the past 200-plus years, the US has experienced runs on banks, depressions, speculative bubbles, bear markets, wars and severe social ruptures but every time the economy recovers and soldiers on, allowing its share market to rise to a new record high.
Well researched and eloquently written, this book is worth re-reading as it enlightens on so many crises and developments too easily forgotten about or ignored.
It is often said those who do not know history are most at risk of repeating its mistakes.
Higgins’ commendable effort fills that void. Those with a healthy appetite for historical facts and insights shall find lots of aha!-moments, and fresh insights.
At the very least, this read offers a better understanding of how we got here today and what tomorrow’s next financial crisis might look like.
Investing in U.S. Financial History: Understanding the Past to Forecast the Future by Mark J Higgins, published by Greenleaf Book Group Press.
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