How to Study History for Business and Investing


Everyone who aspires to be good at business and investing should study history.

(And not just the history of your industry.)

But don’t take it from me.

Take it from Warren Buffett:

“Try to learn about who’s got good businesses and why they’re good businesses. And learn about the businesses that went out of business and why they went out of business.

–That’s a lot of “business(es)”, but it’s important business!

And take it from these other smart people too:

  • Carlos Slim
  • Francis Bacon
  • Felix Dennis
  • Charlie Munger
  • Paul Graham
  • Ray Dalio
  • Robert Rodriguez
  • David Rockefeller

Or from tire-making billionaire Harvey Firestone, who said that:

I notice that when all a man’s information is confined to the field in which he is working, the work is never as good as it ought to be. A man has to get perspective, and he can get it from books or from people–preferably from both.

So, you need to know what has (not) worked in the past, and you need to widen your perspective. . .

One of my personal lessons from studying (business) history comes from the similarity and transferability between the dynamics of the early oil industry and the cable industry:

  • Both were risky industries operating under a type of rowdy, free-for-all dynamic–like a revolving door–for many years, until a few conglomerates formed.
  • Both were fraught with corruption (e.g: bribing officials for licensing).
  • Both created their own industry associations for sake of lobbying and camaraderie (in what was otherwise a cutthroat competition).
  • Both followed a winner-takes-all-and-grows-bigger dynamic.
  • The winning companies  (Standard Oil and TCI) employed a strategy characterized by: (1) Massive acquisitions fueled by debt or using their own stock as currency and (2) creating synergies with acquired companies and strategic alliances (aligning financial incentives) with those they could not buy, but needed to cooperate with.

Two good books are Titan (Rockefeller) and Cable Cowboy (John Malone).

Key questions to ask when studying history:

These questions are general, but they’re particularly useful when studying history for business and investing:

  • Why did X happen? (and why not Y?)
  • What can be learned from this?
  • How much can be attributed to the element of timing?
  • Can I draw any general conclusions?
  • Can I draw any specific conclusions?
  • What led to this success?
  • What led to this mistake?
  • What are some of the recurring patterns of [whatever the history pertains to]?
  • Am I seeing “recurring patterns” where there really are none?
  • What are some common characteristics of successful people in this era/industry/activity?
  • Is it possible for me to replicate what they’re doing?
  • If I cannot replicate them, can I avoid their mistakes?


5+ Billionaire Investors and Businessmen Explain Why it’s Important That You Study History:


1) Carlos Slim Bought Businesses for Practically Nothing

Thanks to his comprehensive study of history (and other fields) Carlos Slim saw an opportunity to purchase a diverse range of Mexican businesses (some acquired for just 3-5% of their book value), when others–who had no sense of history–were afraid to make a move.

Carlos Slim, is it important to study history?

Very important. I think so, in two ways. First, if you’re in business you need to understand the environment. You need to have a vision of the future, and for that you need to know the past. That is very important. But also, on the personal side. A businessman cannot be only business. You need to have more interests. Life offers a lot of interests, many things to know, to learn, to feel, to live.

…. You read a lot of books — how they do, what they do bad, what they do good, the conglomerates of the ’60s, the way they managed. The biographies of some people and what they do, and you can take the good things from them. Not everything, no. And the experience — you can, I think, have experience from the failures of others and your failures, no?

…. I think it was a very important experience, what my father had done. I know the history of Mexico, how we had problems in the past, from the 19th century, and the experience of the economies and the markets when you get a depression, a recession. You know, I believe we don’t need to have economic cycles.

2) George Soros Looks at Financial Markets as a Branch of History

(In contrast to many modern speculators, who limit themselves to the numbers they can see on their screens.)

Soros says, “My conceptual framework applies to the political economy, not to the market economy as an abstract theory.” He then asks himself:

  • Which are the current main rules in the economies of different countries?
    • That govern trade?
    • That set restraints?
  • And how did they come to be?
    • In what time?
    • What was the original intended purposes?
    • How well did it work?
  • What do we have today, and is it outdated?

3) The Source of Ray Dalio’s Macro Mastery Explained

Ray Dalio, founder of Bridgewater, is one of the best macro investors in the world. He attributes much of his success to having spent years and years studying history–both in general and with respect to financial markets. What is his top recommendation?

That you read: Will Durant’s 15 volumes of history (The Story of Civilization).

4) Charlie Munger Was Not Surprised. . .

. . . when David Sokol left Berkshire:

Reporter: “How did the situation make you feel, were you shocked?

Munger: “Well, of course I’m sad. . . If you take the whole of human literature, some of the greatest plots are all the same: Great hero with great qualities, has flaw, world brings huge pain to hero from flaw.

This is the oldest story.

This is the great tragedies, the Shakespeares, this is just the way the world works. And so, I’m not surprised that this story pops up in Berkshire Hathaway. It pops up everwhere in the world. It’s an old story.

4b) How Robert Rodriguez Learned the Tools of the Trade

Robert Rodriguez was in graduate school, where he was taking a portfolio-management investment course.

One day he attended a guest lecture by Charlie Munger on the topic of value investing.

When the lecture was over, he walked up to Munger and asked him:

“What is the one thing that I could do that would make me a better investment professional?”

Munger responded in his characteristic, succinct, manner: “Read history, read history, read history.”

And Rodriguez did.

Today, Robert Rodriguez is the CEO, of FPA, a hedge fund that manages more than $33 billion. (mostly through contrarian investment strategies).1

5) Paul Graham does not recommend history to entrepreneurs but says it has been immensely helpful to him.

Studying history makes it easy for you to falsify it when others are huddling together, saying “this time it’s different!”

Well, if you study history, then you know what has stuck around and what has changed. And so, you see people assuming that something is going to last forever. And you know times in the past, people were assuming something that was going to last forever, it was going to disappear five years into the future. So you think ‘Well, probably not, actually’.

It has been immensely useful for me, so maybe I should. I mean, I read history just because I’m interested. . . . But I don’t consider history to be a field. It’s just all the stuff that’s happened so far. . . It’s something everybody should know.

It’s the experimental data about what works and what doesn’t. That’s what history is. How can you get anything done without knowing experimental data about what worked and what didn’t in the past?

For someone who studied a lot of history, it’s easy to believe that large organizations were just this temporary blip. Because someone who has no sense of history, like people who know nothing about history, all of the past is basically the same. Everything from about 1900 in the past was, like, ladies in castles, and people were riding around on horses and knights or something.. . But if you know far enough back, you know historically the large organization is such a short-lived thing. It’s still written in pencil really. It’s still on trial. It’s still at a trial acceptance. 

Study history for business and investing

In Summary: The Main Uses of  History for Business and Investing

  • We cannot predict the future, but we can learn from the past. Learn what worked and what didn’t and why.
  • History tends to repeat itself in cycles. These cycles of trends are ever-present in fashion, finance and monetary matters, business, dating, just to name a few categories.
  • Study history and you will see how societies build up gradually to the point of collapse. No society ever survives intact. All fiat money systems have failed after a certain amount of time. All systems of country-wide governance fall apart from chaos caused internally due to unfairness or softness from prosperity and prolonged hedonism, or they fall in war.
  • The interesting and unpredictable thing is what happens during the collapse–of an area, industry or country– and during the transformation that follows. Sometimes there is no transformation; only a reversion to previous conditions.
  • You could view history as a set of explosions and implosions, scattering and gathering in constant flux.

Scroll back to the top for the cool questions.

And let me know if you have something to add.


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  1. And here is a good quote by him: “I try to remind people, whether you have a growth manager or a value manager, you’re going to go through cycles where you think you have a village idiot.” 


  1. Ludvig,
    Just starting out or, after 45 years, just starting over, this information is absolutely timeless, spot on and it’s a “Success Support Tool” that should be kept close at hand. This “Tool” is invaluable in a business or in one’s personal life. “Great Stuff!” Thank you for sharing.
    Kind Regards,

  2. Great checklist/questions.

    Making me want to get going on the Durant books! His Story of Philosophy was incredible.

  3. Hi Ludwig, this is an enlightening post and I really love the quote from Warren Buffet about learning why business are good and why they fail.

  4. “History tends to repeat itself in cycles.”

    In a sense. There are repeating patterns, but unlike a true cycle, history never returns to its starting point – each cycle is different. The shrewd observor notices the differences as well as the similarities, and can anticipate when the cycle is prone to break down as well as when it will resume in spite of disturbances.

    For instance: Did the centuries-long cycle of accelerating European wars end in 1945? Or was that just part of a larger cycle of waves of wars, an echo of 1713 and 1815, to be repeated in 20XX?

  5. “All fiat money systems have failed after a certain amount of time.”

    You could say the same for all money systems whatever. Every monetary system exists as a function of prevalent economic conditions, and breaks down when those conditions change. All monetary systems with any real basis in gold have long since failed, for instance. The best cure for people who want to return to a “gold standard” is to study monetary history.

    • Yes, I don’t disagree with that. I’m not a gold bug. (Although I was some years ago.)

      However, a question worth raising is whether we are better or worse off by having an economic system that allows for so much “financial engineering”. There are clearly both benefits and drawbacks, where the main benefits are that thrifty people can (more easily than otherwise) get loans or other types of financing.

      And then there’s the issue of idiot busts, usually brought about by the combination of a few smart, greedy people and a great many short-sighted people. It’s quite frustrating for hard-working, economic people to have to suffer those fools.

      • Whether we would be better off or not is perhaps interesting but in practice there is no option. The vast majority of the money supply is not paper without intrinsic value; it is merely numbers in accounts. To have “sound money” would require (among other things) the abolition of credit cards. Like it or not we’re stuck with a fictional money supply; we need better ways of controlling it, not fantasies about slapping down a gold piece to pay for an ale in a tavern (pardon, “a beer in a pub”).

        What is an “idiot bust” in a monetary context? The U.S. Panic of 2008?

  6. Good list of questions! For me, I love reading history and even if you don’t learn anything, it’s still fascinating to read how things turned out. Sometimes history is stranger than fiction! :)

    One more point I would like to add, that people need to remember when reading history. Do not fall for survivorship bias and the narrative fallacy. Oftentimes you just have to be in the right place at the right time and this is often forgotten when people study events that have passed. A great victory could have easily been a great defeat if some little thing had been different. So whenever studying history, don’t forget to look at all the little factors that could have played a role.

  7. Package Werner says

    Is that sake bottles in the picture on top?

  8. Great examples.
    I especially like Paul Graham’s notion of history as “all the data we have so far”. I’d say, it all just stories or data, depending on the reliability of the source. Unlike in other sciences (physics, math, and most of social sciences) you can switch between different topics without much penalty in understanding.

    • That’s right. That’s why it is said many other academic disciplines have physics envy, striving to emulate or even making up quasi-scientific replacements, when it would just be better to,as you say, simply make the distinction that they are different and need to be oriented to differently.

  9. On another note, this quote really stuck out:

    “You could view history as a set of explosions and implosions, scattering and gathering in constant flux.”

    The same concept could be applied to the “moments” created by your goals and efforts (systems). I remember Mikael Syding referring to workouts as a “bass rhythm”.

    What will the wave of your daily tempo lead towards?

  10. I do not profess to be particularly well read but I am interested in history and have picked up quite a bit of knowledge there over the years while others in my line of work are constantly surprised about new industry trends. They also tend to think every new thing is going to be a revolutionary event, disregarding the robustness of what has been built up and the fundamentals. But the fundamentals are the fundamentals and if you don’t know them or have the discipline to stick to them you will not be in the top 10%.

  11. “A man has to get perspective”.

    This is why contrast is so important. As you know, breaking homeostasis is the best way to “see” the water you’re swimming in.

    Also heard a fantastic quote that said,

    “Until you’re certain in what you WON’T do, only then will your actions be clear.”

    This is similar to the Charlie Munger approach of inverting the question. By eliminating choices, you can focus on the essential.

    Great post!

  12. Voted your podcast, as reparation for long-term lurking. ;P

    Goood guests for it might be the WSP or some tech investor who is not also a boring person.

    Quick question: What is your ratio of male to female readers? If that is not confidential.

  13. Another nice one. I especially like what PG’s was saying. Where is it from?

  14. Josh Weinberger says

    A handy summary you got here. Copied this for my lists.
    Voted for your podcast and hope you win. Best of luck.

  15. Hey Ludwig, I really love your work. And by the way, I bought “ultimate commonplace” this summer, which was very helpful to help me organize my thoughts and knowledge….

    My question is : I’m a parent of 2 young kids + a busy entrepreneur. Lately I have not been able to find enough time to read. IYO, based on your study of great men, how much of my working time should be dedicated to reading for business and self improvement every week ? I’m struggling to find the sweet spot.
    Thanks man, and keep up your very unique and interesting content !

    • Hello Boris,
      Thank you very much for the kind words and the support!

      Reading & self-development:
      It’s all relative. I can’t give an easy answer because it depends a lot on what you’re doing, what your goals are, and what kind of business you’re running. I’m afraid finding a (consistent) sweet spot is tricky in your situation (w/ kids).

      I would wake up 1-2 hours earlier and dedicate that time to reading and strategizing, before officially beginning the day.

      • Thanks for your input aand advice Ludvig. Good news is that’s what I’ve been trying to do : waking up an hour early for self improvement. I’m almost consistent, considering small kids and a business bring a lot of unexpected ! :)

      • The other question is really : what to study if you have just one hour/day.
        If you had a choice, would you prefer to spend 1 month just re-reading and studying 1/2 important books and focusing on internalizing those great books OR to spend 1 month accumulating more and more superficial knowledge by reading as much as possible ?

      • I would definitely internalize (re-read) the best stuff. I hope you keep a review file, it would be helpful for this.

        • Thanks for your answer Ludvig. I definitely do and i organized the file after reading the utimate commonplace system !

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