In my Christmas Post, I began a series about events that led me to be an investment advisor. To start the New Year, let’s reflect on the history of my generation and then try to see the future with a positive outlook.
Despite wars, inflation, immigration, and an uncertain presidential election, I believe Americans will eventually come together and create a brighter future. Why? All the evidence at hand says otherwise.
THE ONE PERCENTERS
My view is tempered by having “seen this movie before”- being one of the One Percent Generation. Of those born between 1930 & 1945, 1% of us are still here. We are the last to:
Climb out of the Great Depression.
Remember the winds of war and World War II that rattled our lives for years.
Spend childhood without television; listen to the radio, read library books, play outside unsupervised.
Have little real understanding of what the world was like.
Have no computers, internet, and often no telephone.
Not be the all-consuming family focus.
Feel secure in the future, although Depression poverty was deeply remembered.
Have no threats to our homeland.
Remember both a great war and a time when our world offered bright promise and plenty.
Many One Percenters think that America can never be that good again. But we can still overcome our current divisiveness.
BENEFITS OF TECHNOLOGY
We tend to look back with “rose colored glasses.” But consider things that did not exist only a few decades ago.
Information
Information on the internet is growing exponentially. For the last 20 years, it has doubled every two years – more than 1,000 x as much as in 2003.
Health
Polio, a crippler and a killer, is now eradicated. Children faced several common diseases, sometimes with lasting effects or death. Like most kids in the 1940s, I had measles, mumps, chicken pox, and whooping cough. These were a part of growing up.
Replacement joints have given many people a new lease on an active life. And heart surgeries have become routine. Vaccinations for flue, shingles, and other medical problems make life more disease resistant.
COMMUNICATIONS – THEN AND NOW
A few examples from my past illustrate how far we have advanced:
“PowerPoint” 1964
At my first corporate job, a supervisor and six full-time workers manually printed easel flip charts for management presentations. The budget for that group would now be a minimum of $550,000. But one person with a $3,000 computer and PowerPoint software can create a week of charts in 8 hours, with far better quality. Cost, about $120,000, a reduction of 80% for a superior product. Better yet, every person can create his or her own charts quicker than telling someone else what to do. [i]
“Excel” 1975
Working on a major acquisition[ii], I needed to create forecast spreadsheets. My company leased computer time, connecting my terminal to a computer on the West Coast via modem. This gave an excel-like spreadsheet, but limited in scope. We usually paid $1500 a month, but one month our bill was $10,000 ($57,000 in 2023) when we ran several forecast scenarios. Today, a computer, monitor, printer, and software for $3,000, provide multiple analytical tools not available in 1975.
“Uber” 1976
I had to go to Newark Airport from New York on a tight schedule. This required a taxi from Manhattan for $50 ($270, 2023). Now, Uber charges $110, a 60% decrease in real dollars, also more comfortable and dependable.
“IPhone” 1981
On a trip to South Africa, I made a three-minute call to North Carolina from my hotel room. The cost was $50 ($173, 2023). Now, calls worldwide are free, with video added.
“Office Communication” 1989
My business partner and I lived in Winston-Salem and Atlanta. Phone calls were expensive, and we limited our talks to 10 minutes after 6 p.m., with low “evening” rates. A 10-minute call was $1.87 ($4.64, 2023), about $100 per month, straining our budget. Now, we text, tweet, and email with no budget constraint.
A WORD OF HOPE AND CAUTION
Despite hard early years, One Percenters have lived at the greatest time and in the greatest country in history. I pray for a continued bright future. We need perspective. A Wall Street Journal op-ed offered this:
“Many people assume that the ideology of the young is a predictor of the future. But students grow up. They start out as pacifists until they realize that other people want to kill them. They start out as socialists until they realize that socialism brings economic ruin. [iii] In the real world, they learn through experience and exposure to other viewpoints that many policies that sound nice lead to terrible consequences.”
A bright future may emerge only after a new generation is tempered by hard times.
“I’ve wondered why the next generation can’t profit from the generation before, but they never do until they get knocked in the head by experience.” President Harry Truman
A new generation will learn difficult truths only from experience. But learn they will.
[i] WSJ 12/05/23 Article reported that children as young as 10 are creating elaborate PowerPoint presentations about what they want for Christmas and emailing them to their parents. So, a 10-year-old could do the work of the entire DuPont group is a couple hours a day.
[ii] RJR’s purchase of Burmah Oil and Gas U.S. The price was $522 million, June 30, 1976 ($2.8 billion, 2023). At the time, the second largest acquisition that had ever been made, and the largest cash acquisition ever.
[iii] In 1980, I sat with the great historian Will Durant at a dinner. Lacking a liberal arts education, I had no idea that this 96-year-old man and his wife Ariel had written their 11 volume History of Civilization. Durant stressed that throughout history, the only economic system that has worked is some form of capitalism. Over time, people will produce only if they get just rewards for their work.
Great reading Gene!
Great perspective! Thanks Gene and happy new year!