Good morning & happy Monday!
Headlines, in a way, are what mislead you because bad news is a headline, and gradual improvement is not.
Bill Gates, co-founder of Microsoft
In the 1970s TV sitcom The Brady Bunch, Jan Brady would constantly say three words: “Marsha, Marsha, Marsha.” Fast forward roughly 50 years and if you tune into any financial news outlet, they just repeat the same 3 word over and over again … inflation, inflation, inflation. It seems to be all the media can talk about these days, and I am fully aware that we are all feeling it’s effects.
The inflation situation in our country continues to play itself out, as have all the numberless “crises” that have gone before it.
It remains impossible to predict when and how this problem will be solved. Likewise, it is impossible to know when and how the markets will anticipate (or react to) such a resolution, and that is a completely different issue.
Financial media persist in reporting this as an unprecedented crisis in the economic and financial life of the world and suggest that it is effectively insoluble. Neither contention is accurate in my judgment, but that is not what today’s memo is about.
My purpose in this week’s memo is simply to suggest that – difficult as it may be – we take our focus off the onslaught of catastrophist headlines, and put it where it belongs:
- Your goals
- Our long-term plan for the achievement of your goals
- Your portfolio as the long-term funding medium for that plan
We didn’t and don’t invest as a speculation on the outcome of current events. We invest pursuant to principals that have always prevailed in the past. Chief among these is faith in the future.
I know that can seem so difficult to have faith in the future with the media constantly screaming at us that the economic world as we know it is crumbling. (see my February 28th Monday Morning Memo about that topic … Monday Morning Memo – Intentional Wealth (intentional-wealth.com). But let’s stop and think about this for a few moments.
- If you go onto the highways, you will probably see electric vehicles and hybrid vehicles all over the place. That was not the case 10 years ago.
- We stream our movies and podcasts and download our music albums … the words steaming and download were not a part of my vocabulary growing up.
- Last summer I was able to visit the Air & Space Museum in Washington DC. One of the displays showed the computers we used to navigate our moon landings with. I’m pretty sure my cell phone has more memory capacity than rooms full of computers did when we landed on the moon.
These are amazing human accomplishments, and the pace in which we are achieving accomplishments is only getting more exponential.
In 1982 inventor R. Buckminster Fuller estimated that up until 1900 human knowledge doubled about every 100 years, by 1945 it was doubling every 25 years. In 1982 it is doubling every 12-13 months and it is estimated now that human knowledge doubles roughly every 12 hours. Source: Thriving in a World of “Knowledge Half-Life” (cio.com)
On March 11, 2020 the World Health Organization declared COVID-19 a global pandemic. On December 14, 2020 the first COVID-19 vaccine shot was administered. Regardless of what you think about the vaccine, it is incredible that 278 days after a pandemic was declared, a vaccine was available.
That same human ingenuity is at work every day in business around the globe to create products, cure diseases, improve efficiencies, and solve problems. As investors we have an opportunity to profit from the advancements in human capacity.
We’ve elected to be guided by history as opposed to headlines. The media has invited us to subscribe to the bizarre thesis “this time is different,” instead we respond “this too shall pass.”
You would not be human if you didn’t experience some degree of fear at the direction of current events from time to time. The great achievement, at times like this, is simply not to give in to the fear. In a very real sense, my whole job is helping you toward that achievement.
As always, please do not hesitate to reach out to me with any questions, thoughts, or concerns.