Lessons from history

  

Rarely in life either privately or in a commercial environment do we come across a unique or totally new situation.

History provides us with many examples of financial crises such as the 18th century South Sea Bubble, the Victorian banking crisis of Overend & Gurney, the Great Depression which followed the 1929 Wall St Crash, the Dot Com Crash. In all of these episodes the common denominators were reckless pursuit of profit whilst fundamentals were ignored, the so called “get rich quick” school of business.

Following each of these debacles there was a collective reigning in and return to the principles of sound business.

However memories are short and it is not long before the blurring starts again and risky practices again become more and more the norm.

We may well be witnessing the start of a new “bubble” in the UK housing market where house prices on average have risen by 6.3% in the past year the biggest annual increase since the start of the financial crisis in November 2007.

As George Santayana commented “those who cannot remember the past are condemned to repeat it”.