Page 126 - Morgan Housel - The Psychology of Money_ Timeless Lessons on Wealth, Greed, and Happiness-Harriman House Limited (2020)

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The correct lesson to learn from surprises is that the world is surprising.
Not that we should use past surprises as a guide to future boundaries; that
we should use past surprises as an admission that we have no idea what
might happen next.

The most important economic events of the future—things that will move
the needle the most—are things that history gives us little to no guide about.

They will be unprecedented events. Their unprecedented nature means we
won’t be prepared for them, which is part of what makes them so impactful.
This is true for both scary events like recessions and wars, and great events
like innovation.

I’m confident in that prediction because surprises moving the needle the
most is the one forecast that’s been accurate at virtually every point in
history.

2. History can be a misleading guide to the future of the economy and
stock market because it doesn’t account for structural changes that are
relevant to today’s world.

Consider a few big ones.

The 401(k) is 42 years old. The Roth IRA is younger, created in the 1990s.
So personal financial advice and analysis about how Americans save for

retirement today is not directly comparable to what made sense just a
generation ago. We have new options. Things changed.

Or take venture capital. It barely existed 25 years ago. There are single
venture capital funds today that are larger than the entire industry was a

generation ago.⁴⁰ In his memoir, Nike founder Phil Knight wrote about his
early days in business: