Over the past four years, owning shares in HSBC (LSE: HSBA) has been highly lucrative for some investors. For one thing, the HSBC share price has gone up by an incredible 159% during that time.

Not only that, but the FTSE 100 share currently offers a dividend yield of 6.4%. That is already attractive in my opinion. But if I had bought at that low point four years ago, I could now be yielding over 16% annually from this blue-chip bank share.

I did not buy back then — but I have been reflecting on the HSBC share price rise and here are a couple of lessons I have taken from it.

The market is not necessarily rational

Sometimes when a share price is high or low, it is easy as an investor to presume that there is good reason for it.

There is a long-running debate about just how well the stock market values companies, pricing in all the known risks and opportunities at any given moment. If the market was totally rational, in my opinion, it would cut out some opportunities that turn out to be lucrative for investors.

Is HSBC really worth 159% more as a business than it was four years ago?

The risks have changed, and pandemic-era risks have receded. But many of the basics, from a strong brand to a large customer base especially in Hong Kong, remain the same.

So I see the surging HSBC share price as a reminder that – sometimes at least – when a share looks cheap it really is cheap. That can be true of a large blue-chip global bank, not just an obscure market minnow.

Current yield and prospective yield are not the same

Back in late 2020 HSBC, in line with other British banks, had suspended dividend payments. So, although the bank had previously been a good dividend payer, the outlook for shareholders from a passive income perspective was uncertain.

But the dividend came back and, as I explained above, the prospective yield for today back in late 2020 (though it was not clear then) was approaching 17%.

That is massive. It is a good reminder that looking at current dividends or even dividend history is not necessarily a guide to what will happen in future. Instead, I try to focus on how much excess free cash flow I believe a company will generate over the long run and how likely I think it is to use that to fund dividends.

How I’ll apply these lessons

Just because the HSBC share price has soared does not necessarily mean it is overvalued. Indeed, even now it trades on a price-to-earnings ratio of under 8.

But I continue to steer clear of banking shares at the moment because I see a risk that a weak economy could hurt earnings.

Still, that does not mean I have not learned anything from HSBC’s stellar share performance over the past few years. Now I hope to apply those lessons as I continue to look for shares to buy.