The Future Ain't What It Used to Be - Alaska Permanent Capital Management


The Future Ain’t What It Used to Be

Jeff-PantagesThe title comes from a quip by Yogi Berra.  The NY Yankee catcher really had a way with words.  My favorite “Yogism” was when he was asked how he would like his pizza … sliced into quarters or eights?  He responded, “Better make it quarters.  I don’t think I can eat eight slices.”

Yogi’s quip regarding the future appears to reflect the mood of the American public.  Polling suggests most of us are pessimistic about the future and older adults worry that their kids won’t have the opportunities that they had.

I think I understand some of the anxiety, but for my money, the future will be better than the past and present.

In an article in Reason magazine titled, “There’s Never Been a Better Time to be Alive”, Ronald Bailey provides some statistics to back up my contention.  He notes dramatic progress in the last 25 years. For example in 1990 37% of the world lived below the poverty line. Today it’s below 10%.  It’s not just poverty; the graph below demonstrates improvement in five critical areas.


Economist Ed Yardeni, points out “technology has an amazing way of shaking up the status quo.  Amazon has replaced mom-and-pop bookstores.  Google means no longer saving shelf space for encyclopedias.  And, just this week, 45,000 cans of Budweiser were delivered in Uber’s self-driving truck.  Who says civilization isn’t making progress?”

Progress, yes, but it must be acknowledged that Uber disturbs the taxi and trucking industries.  Google wiped out the sales of encyclopedias.  And, mom-and-pop stores may be inefficient and more expensive, but they were charming.  This kind of rapid change can be unsettling.

We can’t blame the pessimism out there only on dislike of change. With only 6% of Americans saying the world is getting better, something more is at play.  I blame it on the relentless 24-7 “bad news” cycle, which is amplified by social media and a depressing Presidential election.  To this point, Bailey quotes newspaperman H.L. Mencken as saying, “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.”

That’s pure cynicism, but has some truth to it.  I prefer Warren Buffett’s equally true, but far more optimistic statement made in his recent annual letter.  “It’s been a terrible mistake to bet against America and now is no time to start.  America’s golden goose of commerce and innovation will continue to lay more and larger eggs … and yes, American kids will live far better than their parents.”

Look, obviously we have problems and they are not all imaginary hobgoblins.  They are well documented and reported on frequently. But, a little recognition of the good things that are happening can provide balance and perspective.  It can make you a better investor too!  Why?  Because you will more likely take a longer view, stay the course during inevitable market corrections and be less likely to fall prey to “loss aversion”, which keeps us too fixated on what we might lose, rather than what we might gain – too fixated on the short term.

A report by Credit Suisse quotes a couple of behavioral economists who note that “when you look at the stock market over rolling 10 or 20 years periods you almost always see gains. But in the short run there are lots of ups and downs. In fact how frequently you check your portfolio determines the probability that you will see gains and losses.”

Got that? So, here’s the point.  The more often you check your portfolio, the more often you will see losses. Being loss averse you will probably end up wanting a more conservative portfolio than makes sense, all other things being equal.

While I like Yogi, growing up in the 70’s my favorite group was the Beatles. They sang, “You’ve got to admit it’s getting better, a little better, all the time.” I believe that and think investing with that in mind makes sense.

Jeff Pantages, CFA®
SVP, Investments


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