History Over Accounting as Foundation

""You can always learn accounting on the side," he told his son, "but you've got to study history. History gives you a broad perspective and teaches that…"

"Stock prices ride on a company's earnings. Eventually, earnings, or the lack of same, determine whether the shareholder wins or loses.• Earnings ride on the U.S. economy. The reason to be bullish on stocks is that the U.S. economy has a habit of doubling in size every 16 to 18 years, going back more than a century.• If history repeats itself, the economy will expand eightfold during the adult life of an average investor. Thus, at minimum, an investor can expect a portfolio to generate at least an eightfold gain during his stock-picking career. In periods when stock prices rise faster than earnings, he'll possibly do better. Meanwhile, he'll also benefit from dividends."

"Foreign investors were the biggest losers in U.S. rail projects. The British, in particular, couldn't resist bankrolling the emerging U.S. market in the mid-1800s, just as Americans couldn't resist bankrolling emerging Asian markets in the late 1900s. Much British capital was lost in what turned out to be a gigantic, albeit unintended, charitable contribution to U.S. track laying and road building. Heed it well, ye global capitalists! Fast growth in the latest emerging phenom doesn't necessarily mean fat profits for foreign enthusiasts. The U.S. railroads proved that."