Part 1 was Reflection for Christmas and Part 2 is Vision for New Year's

In part 1, we attempted to reach the 30.000ft level in order to get an overview of what is happening below. We now want to look outward.

Unless you have a working crystal ball, investors usually meet their Waterloo when they become visionary. All time great investors such as Warren Buffett (value) and Peter Lynch (growth) have shown that it takes a lot of hard work in bottom-up analysis. Therefore, rather than visions we want to highlight some existing, very positive trends that are likely to continue. Especially in these times when you score big as a journalist by writing how the pandemic changes everything , we would like to set a counterpoint. Consider it an antidote to any pandemic hysteria. All of the trends listed here are deeply underpinned by science:

First, “The Six Laws of Zero” by Chunka Mui postulate that the cost for these items will all be close to zero by 2050: computing (Moore’s law), communication (going far beyond 5G to near infinite bandwidth), information (e.g. cost of genome testing), energy (e.g. cost of batteries), water (e.g. desalination becomes affordable as energy cost drops) and transportation (while not free, autonomous vehicles will be omnipresent). For details see humanprogress.org/the-six-laws-of-zero-that-will-shape-our-future.

Second, “Ten Global Trends Every Smart Person Should Know”, a very recent book by Ronald Bailey and Marian Tupy. How can 200 pages of statistics not be boring? When it is categorized into ten clear trends that have happened and are underlined with a full-page, simple chart on every other page: great enrichment, end of poverty, abundant resources, peak population, end of famine, more land for nature, planet city, democracy on the march, long peace, and safer world. The foreword from Hans Rosling summarizes the essence of the book best: “I see all this progress, and it fills me with conviction and hope that further progress is possible. This is not optimistic. It is having a clear and reasonable idea about how things are. It is having a worldview that is constructive and useful.”

Third, “Economic Freedom of the World: 2020 Annual Report” includes a chapter by Niclas Berggren and Therese Nilsson on how economic freedom generates social trust and tolerance. A refreshing piece of research and courageous given the current zeitgeist. Berggren/Nilsson’s metastudy brings evidence that “In economically freer countries with a strong rule of law, people tend to be more trusting and tolerant towards gay people and people of another race“.

If 2020 has taught us anything, it is the fact that these positive trends can be interrupted. It is wise to expect an uneven path forward, but these trends will not reverse unless we let them. A pandemic is a special kind of global crisis that does need to be addressed hard and fast. Now may be the time to widen the public debate on corona towards showing empathy for the plight of the world’s poorest caused by our economic recession (see hanseatichunter.com/post/corona-is-not-the-end-of-the-world-a-solution from Aug’20). The faster we get back on track, the faster we will be able to solve major problems from inequality to dealing with a warming climate.

For the stock market, 2020 was an unsustainable aberration. Historically, more meddling, more planned economy, more authoritarian rule has always ended in tears. What the stock markets around the world have told us again and again in the past could be the message for 2021: Bureaucrats of this world – no matter if public, private or NGO - get out of the way, as the achievers are coming!

… or as Bob Dylan sang “The times, they are a changing.”

The HanseaticHunter

#sustainability #humanprogress #stockmarket