H.L. Mencken once said "A cynic is a man who, when he smells flowers, looks around for a coffin.” Perhaps the distinction between cynicism (corrosive) and an appropriate level of skepticism (healthy) in investment has become muddled. Being "contrarian" used to imply one who raised reasonable questions in both bull and bear markets (as Wa…
H.L. Mencken once said "A cynic is a man who, when he smells flowers, looks around for a coffin.” Perhaps the distinction between cynicism (corrosive) and an appropriate level of skepticism (healthy) in investment has become muddled. Being "contrarian" used to imply one who raised reasonable questions in both bull and bear markets (as Warren Buffett once said "be fearful when others are greedy and be greedy only when others are fearfull), but it's become fashionable to, especially in the face of equity markets hitting all-time highs, remain bearish all the time, hoping that one's "stopped-clock is right once a day" moment arrives ... and if it doesn't, as for weather forecasters, there's no penalty for failure. Morgan Stanley used to have the Wall Street strategist game nailed: They had a perma-bull (Barton Biggs), and a perma-bear (Byron Wien), and therefore were never wrong!
We become inured to modern developments: Last year The Economist wrote "In 1981 over 40% of the world’s population lived in extreme poverty. ... Forty years later, only 8% of the world’s population is still in extreme poverty; more than half, on some measures, count as middle class." Stocks now garner historically unthinkable market caps, but ASML just reported €9 billion in orders for its semiconductor production equipment in a single quarter, which dwarfs the annual revenues of the entire industry when I started in the business. Facebook has three billion (!) active monthly users ... ony Coca-Cola used to have numbers like that. I stumbled across a silly YouTube channel where a kid flies around visiting one-star-reviewed restaurants; he has 14 million (!) subscribers https://youtube.com/@ryan , from which he must generate a seven-figure income.
Sure, there are issues with a change from industrial to service economies, with income and wealth inequality, with the rise of nationalism and authoritarian regiemes, but every modern generation faces relentless change and must adapt and overcome ... hopefully without needing depressions or world/cold wars to do so. If we just tweaked the tax system to make it more progressive, changed healthcare systems to single-payer models, elected in some adult supervision in politics, and agreed on sensible energy mix and carbon pricing, we'd probably feel as bullish on the world as we probably felt right before what I feel was the year everything started to change from old to new 'round about 1996. Perhaps that's the eventuality the bouyant stock market is discounting.
H.L. Mencken once said "A cynic is a man who, when he smells flowers, looks around for a coffin.” Perhaps the distinction between cynicism (corrosive) and an appropriate level of skepticism (healthy) in investment has become muddled. Being "contrarian" used to imply one who raised reasonable questions in both bull and bear markets (as Warren Buffett once said "be fearful when others are greedy and be greedy only when others are fearfull), but it's become fashionable to, especially in the face of equity markets hitting all-time highs, remain bearish all the time, hoping that one's "stopped-clock is right once a day" moment arrives ... and if it doesn't, as for weather forecasters, there's no penalty for failure. Morgan Stanley used to have the Wall Street strategist game nailed: They had a perma-bull (Barton Biggs), and a perma-bear (Byron Wien), and therefore were never wrong!
We become inured to modern developments: Last year The Economist wrote "In 1981 over 40% of the world’s population lived in extreme poverty. ... Forty years later, only 8% of the world’s population is still in extreme poverty; more than half, on some measures, count as middle class." Stocks now garner historically unthinkable market caps, but ASML just reported €9 billion in orders for its semiconductor production equipment in a single quarter, which dwarfs the annual revenues of the entire industry when I started in the business. Facebook has three billion (!) active monthly users ... ony Coca-Cola used to have numbers like that. I stumbled across a silly YouTube channel where a kid flies around visiting one-star-reviewed restaurants; he has 14 million (!) subscribers https://youtube.com/@ryan , from which he must generate a seven-figure income.
Sure, there are issues with a change from industrial to service economies, with income and wealth inequality, with the rise of nationalism and authoritarian regiemes, but every modern generation faces relentless change and must adapt and overcome ... hopefully without needing depressions or world/cold wars to do so. If we just tweaked the tax system to make it more progressive, changed healthcare systems to single-payer models, elected in some adult supervision in politics, and agreed on sensible energy mix and carbon pricing, we'd probably feel as bullish on the world as we probably felt right before what I feel was the year everything started to change from old to new 'round about 1996. Perhaps that's the eventuality the bouyant stock market is discounting.
P.S. Prompted by this exchange, I just turned my "1996: The Year The World Changed" slide deck into a Substack post https://gunnarmiller.substack.com/p/1996-the-year-the-world-changed .