History Repeats Itself: How to Profit from War
Elba, Italy, where Napoleon was first exiled. Seems more like a vacation to me.
Imagine you're a French investor in March 1815, just trying to make your way through a chaotic and unstable world. Ten months ago, Napoleon Bonaparte, the great emperor who led France to glory, was exiled, and the Bourbon monarchy returned to power under King Louis XVIII. But the country is struggling—people are unhappy, taxes are high, inflation is through the roof, and jobs are hard to find. Things feel bleak, and you're wondering how to make the most of your investments in such uncertainty.
Then, one day, the newspaper headline drops a bombshell: Napoleon has escaped from Elba! By the 22nd of March, he’s back in Paris, welcomed by cheering crowds. This moment feels like the beginning of a comeback for France, and as someone who has always supported Napoleon, you're excited. You think this is your chance—surely, under Napoleon's leadership again, the economy will recover, and France will become powerful once more. So, you make the bold decision to invest heavily in government bonds, hoping to ride the anticipated wave of Napoleon’s victory.
But things don’t go as planned.
In June, Napoleon marches into Belgium, and the infamous Battle of Waterloo takes place. To your horror, France is defeated, Napoleon is exiled once again, and the monarchy is restored. Your investments take a massive hit, and you’re left asking yourself, “How could I have missed this?”
Battle of Waterloo, 18th of June, 1815
Well, let’s take a look at one family that didn’t miss it: the Rothschilds. The Rothschild banking family had branches in London, Paris, Vienna, and Naples, and they had a knack for making money during wars. Their secret? They funded both sides of the conflict, so no matter who won, they came out on top. When Napoleon returned, they didn’t see a glorious comeback. They saw a leader past his prime, bogged down by bad decisions in Spain and Russia, relying too much on brute force. Instead of investing in France, they shifted their focus to Britain, anticipating a different outcome.
The Rothschilds had access to real-time intelligence, tracking not only the economy but also military strategies, giving them an edge that few others had. They had information that others weren’t focused on. They knew not to let emotions cloud their judgment and instead made decisions based on careful analysis. Even though Napoleon had once brought glory to France, they understood that times had changed, and so did he.
The lesson? Don’t let emotion guide your investments. As much as a leader or event may seem promising, it’s always critical to stay level-headed, rely on facts, and think ahead. Just like the Rothschilds did, staying unbiased and informed is the key to surviving—even thriving—in chaotic times.
