Monetary Regimes and Asset Performance

Demetri Kofinas speaks with financial historian and investor Russell Napier about his "Practical History of Financial Markets" online course, which is provided in conjunction with Edinburgh Business School.

Hidden Forces premium subscribers can sign up using their subscriber email + code "HF50" for a generous 50% DISCOUNT. Genius members can access the course for an even more generous discount of 75%. Sign up today at libraryofmistakes.com/course.

The course runs in three formats: a ~14-hour online version; a two-and-a-half-day in-person version in London (capped at about 30 people); and a university version for mostly post-grad students. This is not just for professionals—many attendees are principals or retail savers who feel responsible for managing their and their families' wealth.

The course is "radically different" from standard finance classes. Instead of starting from pricing theory or discounted cash flow, it takes a historical approach to asset valuation across equities, bonds, cash, commodities, and property, asking the question: "what repeatable conditions caused valuations to change?" The course leans heavily on long-run U.S. and international data, examines market behavior in different monetary and inflation regimes, and includes a module on investing in periods of inflation, disinflation, and deflation.

After completing this course, you should be able to:

✔️ Critically evaluate different methods of valuing stock markets and identify faults in the valuation methods.

✔️ Explain the idea of mean reversion in financial markets and identify valuation techniques that follow mean reversion using data from the last 100 years to demonstrate this.

✔️ Understand the impact inflationary or deflationary forces have on the returns to different classes of financial assets.

✔️ Understand the impact liquidity and the supply of money has on stock market returns over time.

✔️ Understand the impact of psychological biases on returns in the stock market and the role that they can play in major stock market events.

✔️ Critically evaluate the lessons from the history of the financial markets over the past 200 years or more.

As Russell has often said, "when regime change occurs, the greatest risk for any investor is to get all the right answers to all the wrong questions." The ultimate goal of this course is to teach people how to find and ask the RIGHT questions.

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Producer & Host: Demetri Kofinas Editor & Engineer: Stylianos Nicolaou

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Episode Recorded on 10/31/2025