History Bias

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How do you know the sun will rise tomorrow? Do you have any way of proving that there might not be galactic that wipes out our Sun? Your main argument might be that the sun has risen for trillions of days by now and thus the probability for it to rise tomorrow is quite high. And while this is a plausible reason it is not a logical one.

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In politics you will often see single events being abstracted to common rules: "Communism does not work" and "absolute power, absolutely corrupts" would be two of those rules who people like to sell as lessons from history. While I am in no way advocating for neglecting history, I think trying to dumb down history in a few nice catchphrases is very dangerous. History does not repeat itself, it only repeats itself in a very predefined and abstracted way and even that should be treated very carefully.

An example for a failed History Bias is the "previous resistance will be support"-level in Bitcoin. We have seen Bitcoin behave in very repetitive ways, but one day a lot of people lost money because they thought Bitcoin will drop back to somewhere around 6K while he instead kept rising past 10K and never saw the 6K level again.

Rule of thumbs that are made from past experience are a nice tool, but they should never be overestimated, especially when there are only psychology theories like FUD and FOMO as pseudo-logical foundation.

History Bias | Ecency