My wife and I spend most Sunday evenings watching television. We recently came across a channel that plays old reruns of Johnny Carson. Watching reruns from the 1970’s feels a little like being Marty McFly in Back to the Future. It is quite entertaining to be armed with a certain knowledge of what the future holds for Johnny Carson and his guests as they discuss current events.
After watching for several weeks, I was excited to here that Carson would have an “expert” guest on. Naturally, this gentleman had a variety of degrees and was well respected in the scientific community. The guest had just written a best selling book on what the world would look like 30 to 40 years in the future (the book was written in the early 1970’s). Two of his greatest claims were that the United States would be facing mass famine and that oil would be completely depleted from the globe by the year 2000. Currently, approximately 2/3 of the United States is considered overweight and the world is concerned about having too much oil (see Efficient Frontier Issue #1). It amazed me that such a prominent person at the time would so horribly predict the future.
How Did They Get It So Wrong?
This gentleman made 1 major mistake that caused him to so poorly predict the future. He was operating under the assumption that nothing would change. Unfortunately for him, change is the only thing that is certain. He assumed that we would never develop better forms of agriculture or drilling techniques. I once spoke with my Grandmother, who was born in 1913, about life as a child. She remembered life before electricity in your home and having horses (rather than cars) for transportation. I asked if she ever envisioned something as simple as a microwave for cooking foods. She emphatically responded, “Never!” What do the expert from the Carson show and my grandmother have in common? Neither could predict the future with great certainty because they couldn’t imagine the unimaginable.
Can We Predict The Future?
The core principle of investing is a belief that the future will be better than the past. No one would invest today if they believed they would lose money in the future. We all spend our time reviewing the past in an effort to learn from it. After all, those who do not learn from the past are destined to repeat it. Unfortunately, we refuse to learn from the past. The mistake that is repeatedly made deals with the “doomsayers” among us. These doomsayers tend to be very educated and at times lay out a very logical and compelling case. However, they fail to take into account the indomitable desire for the human race to grow and innovate. That variable in their “models,” the unimaginable, permanently changes the direction of our lives. The only thing I can clearly see in my “crystal ball” is change. Those changes will make our lives better and create opportunities where none previously existed. That is the future I believe in and hope you do too.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
