The Biggest Investing Lessons Come from History 17Jul2026
Every generation of investors believes it is living through a market event unlike anything the world has seen before.
A new crisis arrives. A new reason for panic emerges. A new group of investors says, "This time is different."
But when we look back at history, we discover something interesting. The names change. The countries change. The technology changes. But human behaviour remains remarkably the same.
Fear and greed have always driven markets.
On 19Oct1987, the world witnessed one of the most dramatic days in stock market history. Known as Black Monday, the S&P 500 fell nearly 20 per cent, while the Dow dropped more than 22 per cent in a single day.
Imagine watching one-fifth of your wealth disappear in a matter of hours. There was no pandemic, no world war and no single event that fully explained the collapse. Fear simply spread from one investor to another.
People sold because everyone around them was selling.
That pattern has repeated many times.
But this was not the first time markets had behaved this way.
I still remember the Indian stock market crash of Jan2008. Between Jan10th and Jan25th, many Indian stocks lost 50 to 70 per cent of their value. Companies that investors believed represented India's long-term growth story suddenly became victims of panic selling.
Many investors who thought they understood risk learned a painful lesson: a great company or a strong economic story does not protect you from market fear.
During the global financial crisis of 2008, Lehman Brothers, once one of the most respected financial institutions in the world, collapsed into bankruptcy. A company that had existed for more than 150 years disappeared because years of excessive risk-taking eventually caught up with it.
Enron followed a similar path earlier in the decade. Once considered one of America's most innovative companies, it went from a Wall Street favourite to bankruptcy after accounting fraud was uncovered. Investors who believed the company was too successful to fail lost almost everything.
The lesson was clear: markets can punish investors who confuse popularity with safety.
The technology boom and bust provided more examples.
In 2022, Meta (aka Facebook) lost more than one-fourth of its value in a single trading session after investors became concerned about slowing growth and rising costs. Around the same period, Netflix fell more than 35 per cent in one day after reporting its first subscriber decline in over a decade.
PayPal also lost almost 25 per cent in a single session after disappointing investors with its outlook.
In the past few days, Lucid Motors lost more than 50 per cent of its value in a single day after reports raised fears about a possible bankruptcy or restructuring, although the company denied those reports. IBM, one of the world's oldest technology companies, also experienced one of its largest-ever single-day declines (about 25 per cent) after a profit warning.
These were not unknown companies. They were among the most recognised technology businesses in the world.
Across Asia, investors have experienced similar shocks.
In India, Adani group companies saw a sharp decline after the Hindenburg report triggered concerns among investors. In China and Hong Kong, property giant Evergrande collapsed under massive debt, wiping out billions of dollars in shareholder value.
South Korea provided another recent reminder of how quickly market sentiment can change. In the past few months, semiconductor giant SK Hynix experienced extreme volatility, with its shares seeing sharp daily swings as investors reassessed expectations around the artificial intelligence boom.
The broader KOSPI index also witnessed dramatic moves, with trading halts triggered during periods of intense selling pressure as concerns spread across technology and chip stocks.
These examples show that volatility is not limited to weak companies or troubled economies. Even some of the world's most successful businesses can experience sudden and painful declines when investor confidence changes.
The details are different every time.
The emotions are not. We investors tend to move between irrational exuberance and downright pessimism.
Markets rise when optimism feeds on itself. Investors see rising prices and become convinced that the future can only get better. Confidence attracts more buyers, which pushes prices even higher.
Then something changes.
A disappointing result, an economic shock, a financial scandal or simply a change in sentiment can turn optimism into fear. Investors who once rushed to buy suddenly rush to sell.
This is why studying stock market history matters.
History cannot tell you when the next crash will happen. It cannot predict which company will become the next success story or the next failure.
But history teaches you how markets behave.
It reminds you that crashes are not unusual. They are part of investing. It helps you understand that extreme fear and extreme optimism are often temporary emotions rather than permanent realities.
An investor who has studied past market crashes is less likely to panic when the next one arrives.
Instead of following the crowd, they can step back and ask better questions: Has the business truly changed? Is the fear justified? Or is the market simply reacting emotionally?
Action button for long term investors under uncertainty and volatility:
1) Separate a falling price from changing facts.
If only the share price has dropped, don't rush to act. If you've learned something important about the business that you didn't know before, take another careful look.
2) Decide what would change your mind before it happens.
When you're thinking clearly, write down the facts or events that would make you sell or rethink your investment.
3) Check if the business is really making money.
Some companies, like Enron, Lehman Brothers and Evergrande, looked stronger than they really were because of hidden debt or misleading accounts. Many tech companies that fell in 2022 were different—their prices dropped, but most didn't have the same accounting problems.
4) A long-term approach only works if the business survives.
Time helps strong businesses grow. It doesn't save weak businesses—it often exposes their problems even faster.
That ability to stay calm is one of the greatest advantages an investor can have.
The biggest investing lessons do not come only from financial statements, valuation models or market forecasts. They come from understanding people.
Every market cycle teaches the same lesson: human nature does not change.
The companies will change. The headlines will change. The reasons for the next crisis will change.
But fear and greed will continue to shape markets.
And that is why history remains one of the greatest teachers for every investor.
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Seth Klarman quote:
“The stock market is the story of cycles and of the human behavior that is responsible for overreactions in both directions.”
Are Indian Stocks Immune to Adani Stock Meltdown? 08Feb2023
Meltdown in Adani group Listed Stocks 04Feb2023
Adani Stocks Meltdown and Nifty Next 50 Index 15Feb2023
22Mar2026 Tweet thread - Financial market history - regime change or regime shift - human behaviour, greed and fear - Post-COVID and pre-COVID, history rhymes, overconfidence bias - illusion of control bias - market timing - what actually works
05Apr2025 Tweet - embrace uncertainty and volatility - decision-making under uncertainty and volatility
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Historical Examples:
Black Monday (19Oct1987): The Dow Jones Industrial Average fell 22.6 per cent in a single day, while the S&P 500 dropped nearly 20 per cent. It remains one of the worst one-day market crashes in history.
India Market Crash (Jan2008): Months before the global financial crisis, many Indian stocks lost 50 to 70 per cent of their value within weeks as investor confidence collapsed.
Lehman Brothers Collapse (15Sep2008): Lehman Brothers filed for bankruptcy, and its stock lost almost all its value as the global financial crisis intensified.
Enron Collapse (2001): Once considered one of America's most innovative companies, Enron collapsed after an accounting fraud scandal. Its stock fell from around $90 to almost zero.
Meta Platforms (03Feb2022): Meta shares fell about 26 per cent in one day after disappointing guidance, slowing user growth, and concerns about rising spending.
Netflix (20Ap2022): Netflix shares dropped more than 35 per cent in one session after reporting its first subscriber decline in over a decade.
PayPal (02Feb2022): PayPal fell nearly 25 per cent in one day after weaker growth expectations disappointed investors.
Adani Group Stocks (Feb2023): Adani Group companies experienced sharp declines after the Hindenburg Research report triggered concerns among investors.
Evergrande Crisis (2021 onwards): China’s property giant Evergrande faced a debt crisis, leading to a collapse in its share price and raising concerns about China's property sector.
SK Hynix and KOSPI Volatility (2026): South Korean markets experienced sharp swings as investors reassessed expectations around artificial intelligence, semiconductor demand, and technology valuations.
Lucid Motors (Jul2026): Lucid shares fell sharply after bankruptcy-related concerns and investor uncertainty triggered heavy selling.
IBM (Jul2026): IBM experienced one of its largest single-day declines after concerns about earnings and future growth expectations affected investor sentiment.
Mar2020 COVID Crash: Global markets experienced extreme volatility as the pandemic triggered one of the fastest bear markets in history, with several days of double-digit index moves.
Copper Market Cycles: Copper has experienced repeated boom-and-bust cycles over decades, showing how quickly optimism can turn into fear across financial markets. The same goes with gold and silver too.
