A screen displays the Dow Jones Industrial Average after the closing bell on the floor of the New York Stock Exchange in New York City, U.S., March 1, 2022. REUTERS/Brendan McDermidLONDON, May 5 - Last week, a new business and finance library opened its doors in Edinburgh’s New Town. Thewas named by its founder, the investment strategist Russell Napier, in the fond belief that the study of history can improve financial understanding, as he says, “one mistake at a time.
The best investors learn from their mistakes. Even the most successful are wrong nearly half the time, which gives them plenty of material to dwell upon. A willingness to admit to errors, says Napier, indicates an open mind. Richard Oldfield, an experienced British fund manager, opens his witty and wise book on investment, “
The opening of the new library was accompanied by a weeklong “Festival of Mistakes”. At one event, seasoned investors discussed their career-defining blunders. Former emerging markets fund manager Angus Tulloch confessed that he’d failed to anticipate the disruption that the internet would bring to so many businesses and advised younger investors to spend at least 15 minutes a day writing down their mistakes.
There’s scant evidence the disastrous errors revealed by the financial crisis imparted any lasting lessons. In fact, most recent high-profile investment disasters involve some mixture of illiquidity and excessive leverage. In 2019, the British investor Neil Woodford shut up shop after an outsized bet on unlisted securities meant his investment firm couldn’t meet redemption requests from clients.