Is history really a good indicator of the future?

Recently, during the COVID pandemic, many commentators have made references to "..if history is any indicator". This of course implies that the old adage "those who ignore history are doomed to repeat it" is valid.

Ironically, on the other hand, investors are warned that "past performance is no guarantee of future returns". Clearly this is true given that many companies that were rock stars decades ago no longer exist.

So, why is this dictum selectively used?

My take is adapted from one of my favourite books - "what got us here won't get us there" by Marshall Goldsmith.

I believe the world has changed (and will continue to evolve) dramatically and using the past to predict the future is a foolhardy exercise.

In the corporate context, industry dynamics change, the competitive landscape changes, technologies disrupt and customer preferences change.

Too often companies are so busy defending the status quo and unwilling to let go of the cash cow, that they don't see the writing on the wall and become obsolete.

As an example, a business I worked in was making huge revenues and profits of a product line geared to service copper telephony networks. We thought we were very far sighted as we tentatively adapted to fiber networks but completely missed the boat on wireless.

Correlation is too often mistaken for causation. History may be a good teacher but rarely a predictor.

Even in the case of behaviour, the phrase "a tiger cannot change it stripes"is often used to indicate that people are incapable of changing and past actions determine future behaviour, is questionable (though unfortunately people are rarely given an opportunity for redemption)

This applies to our personal lives as well. What worked for our parents rarely works for us and for sure will not work for our children.

In conclusion beware when you assume that what worked then will work now.