Podcast Summary: Hidden Forces

Episode: A Practical History of Financial Markets | Russell Napier

Host: Demetri Kofinas
Guest: Russell Napier
Date: November 6, 2025

Overview

This special episode of Hidden Forces features a direct conversation between Demetri Kofinas and Russell Napier about Napier’s renowned course, "A Practical History of Financial Markets" (aka "Advanced Valuation in Financial Markets" at Edinburgh University). Rather than a typical interview, this is a deep dive into the course content and philosophy, its evolution over time, and unique elements that distinguish it from traditional financial education. The discussion also provides guidance on who the course is for and how it helps individuals—both professionals and non-professionals—understand the mechanics of financial markets across different regimes.

Key Discussion Points & Insights

1. Course Purpose & Target Audience

• Practitioner-led, Practical Focus:
  • The course is designed and taught by financial market practitioners with decades of experience.
  • It focuses on real-world historical data over abstract academic theory.
  • While professionals attend, it is also suited for non-professionals, including postgraduates and anyone "with skin in the game" (05:23).
• Not a Trading Course:
  • Emphasizes long-term investment horizons and intergenerational wealth considerations.
  • “It’s not one of those courses. There’s plenty of those around. … It’s really about those three liquid asset classes [equities, bonds, cash] over the long term.” (06:44)

2. Content Structure & Evolution

• Continuous Evolution:
  • The course evolves with market realities and practitioners’ experiences.
  • “This course evolves because it’s taught by practitioners. … It would be virtually the same course, but it would have moved on.” (03:07)
• Global Historical Data:
  • Utilizes deep historical datasets, including US stock market valuation data going back to 1801 and the Dimson, Marsh, and Staunton database covering 20+ countries since 1900.
• Key Asset Classes & Sectors:
  • Focuses on equities, bonds, and cash, with some attention to gold and property.
  • Explores which sectors perform best in various financial/regime environments (banks, chemicals, retail, pharmaceuticals, tobacco, etc.).

3. Differentiator: Learning From History, Not Just Theory

• Practical History vs Academics:
  • Contrasts with traditional finance education, which is heavily theory-based.
  • “Most courses … are based on a theory of how securities should be priced. … We work on the basis of how they have been valued, as opposed to the theory of how they should be valued.” (10:20)
• Valuation Across Regimes:
  • Uniquely examines how markets perform under inflation, deflation, and disinflation, teaching which asset classes and sectors historically out- or underperformed.
• Behavioral Psychology & Policy Context:
  • Integrates modules on behavioral psychology and the effects of monetary policy and regime changes.

4. Teaching Philosophy: Asking the Right Questions

• Focus on Inquiry, Not Simple Answers:
  • “I don’t think we have simple answers to difficult questions. … What it’s really about is learning how to ask the right questions.” (09:13)
  • Napier stresses that understanding how markets work at a systemic level is more valuable than merely having answers to surface-level problems.

5. Course Logistics & Formats

• Course Formats:
  • In-Person: Two and a half day intensive sessions (typically London, occasionally Edinburgh), capped at 30 participants to ensure interaction.
  • Online: Equivalent to about 14 hours of material, accessible globally.
  • University Version: Taught at Heriot-Watt University (not Edinburgh University, despite the name confusion).
• Upcoming Sessions & Expansion:
  • Courses worldwide: Lausanne, Pune, Singapore, London, Mumbai, Montreal (under local names).
  • "[They're] coming to us and saying we need these. We realize that there is more in heaven and earth than is dreamt of in the philosophy of the modern portfolio theory." (22:44)

6. Relevance for Young or New Market Participants

• Growing Demand Among Younger Generations:
  • Napier notes increased interest from under-30s seeking reading lists and mentorship.
  • “I think everyone’s realizing now that you need a skill set that is bigger than discounting cash flows. If you’re not going to get that from financial history, where are you really going to get it from?” (20:42)

Notable Quotes & Memorable Moments

“What should it profit a man if you get all the right answers to all the wrong questions?”
— Russell Napier (09:13)

“We work on the basis of how [securities] have been valued, as opposed to the theory of how [they] should be valued.”
— Russell Napier (10:23)

“You will learn about not just how a market and which asset classes behave well in deflation, but also which sectors … for each of the differing conditions. And, of course, the transition between sectors is pretty vital as well.”
— Russell Napier (13:17)

“[It's] not a trading course … It has got a longer term time horizon and that’s the focus, I think, which is a realistic time horizon for most people who will become their principals. … They’re talking about intergenerational wealth here as well.”
— Russell Napier (06:44)

“When I write for a living, for the Solid Ground, or in my books, I’m writing about that near term, but it’s in the context of how the thing works. … So every research report [is] written in the context of a belief that this is how the system works and … it’s radically different from economic theory.”
— Russell Napier (16:12)

“This is Manhattan. We don’t do mistakes.”
— Wall Street banker, as recounted by Russell Napier (23:14)

Timestamps for Important Segments

| Timestamp | Segment Description | |------------|-----------------------------------------------------------------------------| | 00:09 | Episode setup, Napier’s book collection, background to the course promotion | | 03:07 | Course evolution over time; practitioner-led learning | | 05:23 | Who the course is for; not just for professionals | | 06:44 | Course focus: Equities, bonds, valuation history, long-term orientation | | 09:13 | Course length, module structure, approach to teaching questions | | 10:20 | Contrast with theoretical education; why history matters | | 13:00 | Sectoral and asset class performance in different monetary regimes | | 14:57 | Module summary (valuations, psychology, monetary policy) | | 16:12 | How the course complements Napier’s writing and other resources | | 18:46 | Clarifies course venues and university partnership (Heriot-Watt University) | | 20:42 | Napier on mentorship, younger audiences, and financial literacy | | 21:57 | Library of Mistakes global expansion | | 23:14 | “We don’t do mistakes” — Wall Street story | | 23:37 | Napier’s final encouragement and Kofinas’s summary of value |

Additional Details

• Discount Codes:
  • Hidden Forces Premium subscribers: 50% off with code HF50
  • Genius members: 75% off (details in Genius forum)
• Sign Up:
  • libraryofmistakes.com
  • Use the email associated with your Hidden Forces subscription

Tone & Final Impressions

The discussion is collegial, warm, and richly informative, with Napier and Kofinas both displaying a shared reverence for history’s practical lessons. The tone is serious about financial education but hat-tipped with dry humor and humility, especially as Napier quips about their overflowing bookshelves and the “bigger boat” required for learning (00:12). The core message is clear: understanding the mechanics and context of financial markets—rooted in historical cycles and regimes—matters far more than textbook formulas.

"You can't do that with an answers-based approach to learning. You have to have an inquiry-based approach and you have to know what questions to ask. And I think you do that so incredibly well."
— Demetri Kofinas (23:37)

In Summary

Russell Napier’s course stands apart for its insistence on practical, data-driven history over abstraction, its unique cross-regime perspective, and a vibrant learning community. Whether professional or amateur, anyone interested in gaining a working, strategic grasp of financial markets—especially in a world of shifting monetary and geopolitical regimes—would benefit from this robust curriculum.