Neither Natural Nor Inevitable
If 2020 has taught us anything, it's reminded us that there wide distribution of possibilities we can encounter in the world. There is not a soul on earth that could have predicted not only the fallout but the pace of recovery that the world has set on our path back to normalcy. The more I think about it, the more awe I'm in, but that shouldn't be true. While events like this are random and unlikely, they do happen every so often. Wars, disease, and economic collapses commonly occur throughout history but we are never ready for them. Why is that?
One of the most common phrases on addressing history is one of my least favorites: "History doesn't repeat itself but it often rhymes". Yeah no shit. Thanks, Mark Twain (I'm actually a Twain fan this is just incredibly overused). I came across another that gets at this same idea in Sapiens that I think does the addressing of history much more justice.
"So why study history? Unlike physics or economics, history is not a means for making accurate predictions. We study history not to know the future but to widen our horizons, to understand that our present situation is neither natural nor inevitable and that we consequently have many more possibilities before us than we imagine."
This quote explains why we are never ready for the unpredictable. Our small-mindedness keeps up from thinking about alternatives that could occur as a result of what is going on. I'm a little biased to the financial world but I think back on the history of the stock market - immediately before each crash, things are looking as good as they ever have been. And then, out of nowhere, a black swan event. So what do we do about this?
It's hard to advocate living in fear of the unknown. For the large majority of the time, things are good and you would live at a severe disadvantage if you chose to live a lifestyle that anticipated an event every day. You also can't ignore the possibility of these events, though most people do, our memories are very short (especially investors). I'm not sure what the answer is other than to never forget things that have happened. Maybe that is why people advocate for the study of history, not that it will aid them in predicting the future but as a reminder of the possibilities.