Good morning & happy Monday!
You should be far more concerned with your current trajectory than with your current results.
James Clear, author (he wrote an amazing book “Atomic Habits”)
July 31, 2022, a very important person in history was born. Even though he is only 23 days old now I think the vast majority of us will know his name and be familiar with his family. The person I am referring to is George Jetson from the 1960s TV show the Jetsons (Theme Song | The Jetsons | Warner Archive – YouTube). The Jetsons story takes place in the year 2062 where George is 40 years old.
The Jetsons first episode aired on Sunday, September 23, 1962. What was happening in 1962 when that show first aired? Marilyn Monroe died, the Cuban Missile Crisis brought us to the brink of nuclear war, and John Glenn became the first American to orbit the earth as the US continued the space race with the USSR. That same year the first modem was invented with a speed of 300 bits per second, the first Target store opened, the first Taco Bell opened, audio cassettes were invented, and the first computer video game (Spacewar) was invented. (1962 History, Trivia and Fun Facts – Pop Culture | History | Facts | Trivia (popculturemadness.com))
A few weeks ago I upgraded the internet speed at my office to 300MBPS (megabits per second). I am far from a technology expert, but my research tells me that 1 megabit = 1,000,000 bits. So, the internet speed at my office is one million times faster transfer speed than that original modem from 1962. Today there are 1,937 Target stores that generated over $93 billion in sales in 2021. There are more than 7,000 Taco Bells around the world that serve over 40 million people each week. My dad jokes that he has bought every Beatles album 5 times … record, 8-track, cassette, CD, and now digital, due to the constant changing of how we listen to music. And don’t even get me started on video games … an industry expected to generate over $200 billion in revenue this year (and causing massive issues in our society if you were looking for my unsolicited opinion).
Bottom line, as you already know, it is a vastly different world than it was in 1962 when the Jetsons were first on the TV set. Humanity has made incredible technological progress (and obviously there are plenty of challenges that come as a result).
The world is a mess, I get that. But in 1962 the kids had drills in school to hide under their desks in the event that a nuclear weapon was launched (call me a skeptic, but I’m not sure that hiding under a desk will provide much protection against a nuclear bomb, but I digress). Today there are more problems than we can count, but think of the amazing things we now just take for granted that did not even exist in 1962 … cell phones, Google, Amazon, personal computers, email, Facebook, GPS … these are things we use every day and actually would have a hard time imagining how life was before them. That is progress … and the companies advancing progress will continue to grow, advance, and generate profits for their owners. We as stock holders are those owners.
On Monday, September 24, 1962, the day after the first Jetsons episode ran, the S&P 500 closed at 56.63 (source: Yahoo! Finance), at the end of July 2022 the value was 4,130.29 … 72.93 times the 1962 value, and that does not even include dividends! When we factor in dividends being reinvested (see Monday morning memo from 8/1/2022) the return becomes 36,913% … or 369.13 times the value in 1962!!! (S&P 500 Return Calculator, with Dividend Reinvestment (dqydj.com))
Even though the stock market and investing can seem quite complicated, the overall principal is quite simple. The stock market has advanced significantly because human achievement has advanced significantly.
And I can’t imagine a scenario where that does not continue.
Can you imagine what the world will look like in 2062, the year the Jetsons were representing? The projections are that you will be able to book a trip to space like you can book an airline ticket today, that virtual reality glasses will replace smartphones (where app use can be managed through brain activity), and that human-like robots will be mainstream. I know these might sound like scary developments, but that’s where the world is headed no matter if we like it or not. Don’t shoot the messenger 😉
Here’s what I know: humans (and the business they operate) will continue to strive for advancement and technologies will continue to advance. In a April 5, 2019 article by CIO.com it was reported that up until 1900 it was estimated that human knowledge doubled approximately every 100 years. By 1945 it was doubling every 25 years, buy 1982 it was doubling every 12-13 months. It is now estimated that human knowledge doubles every 12 hours!
We are living at the absolute pinnacle of human existence, and things are only advancing from here. As equity investors we have an opportunity to profit from these advances and the business that are leading the charge. It’s truly an amazing opportunity and an incredible time to be alive.
It is an honor to partner with you on your investment journey. Please feel free to call or email any time my team or I can be of assistance.