One truth of archaeology in particular bears directly on my thinking. Archaeologists have their specialties, and one of the curiosities of the field is that those who specialize in one aspect of antiquity tend to be blind to anything else. Archaeologists who look for pottery sherds will not see coins, and, conversely, those who look for coins will

both cases, psychology proved critical. Napoleon’s delusion was to believe in military strategy and underestimate the role of morale; his generals failed to appreciate that Russian citizens battling for their lives on their home soil had far greater incentive to fight than did a poilu from Paris yearning for the Champs Elysées. The LTCM strategists

Investors are very good at recognizing the moods of the past—for example, the Roaring Twenties, the Great Depression, the Swinging Sixties—but we tend to be oblivious to the mood of the present. When do we notice that the world has changed? Sometimes change arrives with a bang. The dropping of the atomic bomb on Hiroshima instantly and permanently

Those most adept at profiting from a particular market are often least likely to notice when the game is over, and probably the least psychologically prepared to profit from the successor market.

But the market has even crueler twists. It’s not sufficient that a player figure out when the game has changed. When a market shifts, it usually requires the investor to adopt a psychological stance anathema to the precepts upon which he built his earlier success.

We hired Milton Pollack, a brilliant lawyer who later became a distinguished federal judge. The suit unfolded slowly, and I fell into a ritual of having dinner with Pollack once a month during which he would update me on our progress and his methods. At that time he had a daughter in elementary school; he told me that before he asked any question o

All specialists have a time frame that they believe is important—the astrophysicist who thinks in terms of billions of years can’t put himself in the mind of the meteorologist who thinks about the future in terms of hours and days. Both will be befuddled by the archaeologist whose time scale spans less that that of the astrophysicist but more than

The mid-1970s were not a productive time for the markets, which stagnated between 1964 and 1982; the Dow closed at 874 in 1964 and at 875 in 1981, racking up a magnificent gain of one point in seventeen years. Anybody who began investing in the 1990s, and had the expectation that stocks regularly outperform all other investments, should spend a mom

mistake in launching the Oppenheimer Fund was in not sufficiently appreciating how skepticism about the unfamiliar can obscure the merits of even the best ideas.