Important Life Lessons From The Galveston Hurricane Of 1900

In August 1900, Galveston Island, Texas suffered the worst natural disaster in U.S. history, with over 10,000 killed in a single hurricane. This crisis could have been largely avoided except for the flaws in human nature that we see bringing continual losses in the stock market over the past century. Here are the life lessons from the Galveston hurricane that apply to investing and should be avoided if you want to be successful.

There is very little warning before disaster strikes

The weather on Galveston beach was very nice the day of the hurricane. It was sunny and the waves were unusually large. More people than normal went to the beach that day to enjoy the experience. And then suddenly the storm rolled in and everyone was in the worst position possible. If you look at the headlines on October 28th, 1929 – the day before the Great Depression hit and stocks collapsed, it was lighthearted articles on such things as the Yale football game and popular movies with absolutely no sign of economic collapse. In life you don't always get plenty of advance notice, and you have to always remain vigilant and anticipate that there may be a problem even when things look good.

Take no comfort in following the "herd"

When word came to Galveston Island from ships at sea, letting everyone know that a terrible hurricane was heading their way, the person who received the message jumped on a horse and rode up and down the beach yelling to go ashore because a storm was coming, but nobody moved because they thought that the others ignoring the message must mean that everything was fine. You see the same thing today with the U.S. stock market, as people think that things must be OK since others are not selling their shares.

Listen to those who are qualified to offer advice and ignore those who are not qualified

One of the foolish behaviors of those on the beach was that they disregarded the official on the horse and instead listened to other beachgoers who had no clue what they were talking about. Right now, you have many experts on the U.S. economy – including Warren Buffett – that have been very clear in their prediction that the American stock market is horribly overpriced and poised to drop significantly. Yet many people don't listen to some of the greatest living economists and instead only listen to those who tell them what they want to hear.

By the tme you figure out you're in trouble it's too late to get out

When those on the beach saw the jet-black clouds of the storm and the water rising, it was too late to get out of harm's way. Similarly, when you suddenly realize the stock market is about to crash, nobody is buying and everybody is selling. To succeed in life you have to watch for changes and harness the power of being contrarian. As Sam Zell once said "when everyone is looking left, look right".

How this all relates to mobile home park investing

To buy a mobile home park you have to be a true contrarian. You have to ignore the naysayers and accept the fact that timing the stock market is a lot more difficult than investing in affordable housing. Right now, it appears clear that the U.S. economy is heading for either recession or stagflation – and both will prove a disaster for the stock market. To succeed you need to invest in something that enjoys greater demand and higher rents as the economy goes into decline. And that asset is the mob9ile home park. They performed well in the bust in 2000 and the Great Recession in 2007 and will do just fine in whatever the U.S. economy throws at us all in the next few months.


In today's troubled world you have to be ever vigilant for changes, embrace them when discovered, and make fast movement before the "herd" figures it out.

Frank Rolfe
Frank Rolfe has been an investor in mobile home parks for almost 30 years, and has owned and operated hundreds of mobile home parks during that time. He is currently ranked, with his partner Dave Reynolds, as the 5th largest mobile home park owner in the U.S., with around 20,000 lots spread out over 25 states. Along the way, Frank began writing about the industry, and his books, coupled with those of his partner Dave Reynolds, evolved into a course and boot camp on mobile home park investing that has become the leader in this niche of commercial real estate.