Friday, June 26, 2009

News From 1930

All too often, investors either ignore or are unaware of historical precedents to today's economic issues. Whether it be the oft-repeated bullish proclamation "They're not making any more land!" (due to a lack of recognition of the repeated boom and bust nature of the housing industry), or beliefs that well-operated, efficient businesses will be quickly erased by emerging technologies, the lessons of history often go unheeded.

One site that offers temporary reprieve from the mentality that we are in uncharted waters is News From 1930. Each day, readers are given a summary of the news on this date in 1930! Following the stock market crash in 1929, investors in 1930 were in a similar position to investors today: is a recovery on the way, or is there more gloom on the horizon?

Of course, we know (or can find out) what happened in the years following 1930, and that doesn't help us determine what will happen tomorrow. However, by educating ourselves on the events that took place in prior recessions, we gain an understanding of where this recession fits (both in magnitude and in velocity) in a historical context, and what needs to take place before a recovery takes place.

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