Twenty Five Years of CNN
On Sunday as a treat as you do when you're older we drove to a local Garden Centre to top up our smelly candle collection and have tea and cakes. While there I bumped into Ian who used to be downstairs from us in Nobel House running an engineering business. Funnily enough he'd changed quite a bit, with a splattering of white hair where a thatch of black used to be. As in the old days we swapped insults before calculating how long it had been since we'd seen each other. To our joint astonishment we agreed it must have been 25 years. Later that afternoon killing time before the World Cup Final a browse around my iPad established that it was also 25 years since CNN was launched.
Do you know what CNN stands for? Constantly Negative News! Yes CNN who 25 years ago when the Berlin Wall was ripped down predicted long term economic disasters for the West as it bailed out East Germany. Wrong then. Still wrong. CNN should make a film of itself ...One Side Story. Sadly it's a model copied nowadays by too many others in the Information Distribution industry. Their mantra appears to be ... don't let facts get in the road of a good story.
My two grannies without access to "experts" were more accurate with their predictions I recall, even though one died 56 years ago when I was 11, the other when I was 23 ... "Never forget there's always two sides to every story son" and.... "old age doesn't come itself" were particular favourites of theirs. Over the 40 odd years as an IFA I have long realised how true the first one is, but only latterly come to recognise the accuracy of the second observation. Living as I do in Bo'ness, where they lived all their lives, and where post glacial raised beaches "enhanced" the town's landscape with steep braes it used to confuse me hearing them also say they could remember the town before there were hills. Now at my advanced years I finally get it!
but like my grannies I hope the thoughts I send out each month in this Letter are as useful to you as theirs were to me. Let's take their first observation. Always two sides to every story. Something that's very noticeable and was discussed only this morning at our board meeting is the balanced reporting we could rely on a few years ago from TV News and National Newspapers has all but vanished. Sensationalism is now the name of their game. That and onesidedness. Day after day we see a different problem which "will" impact the world economy negatively. And yet day after day year after year their dire predictions come to nought.
Surely the inventions of the Flat Screen Telly and 24 hour News Channels have to go down as two of the worst ever. In the good old days you could nip off for a fortnight's holidays with the kids, lap up the sun somewhere (probably the Med), have no access whatsoever to television or newspapers in your own language, be oblivious to what was going on elsewhere and come home refreshed. Even though while you were away some war, natural disaster or financial mayhem had been and gone.
Mike Williams our man in Chicago emailed us stats on how the World Economy has changed in these 25 years dominated by the gloom from the CNNs and BBCs of our modern world. Since CNN's first broadcast in '89 we've lived through 3 major global recessions, the worst financial crisis since the 1930s, 3 Stockmarket crashes, 2 Gulf wars, collapse of the USSR, international terrorism, earthquakes, tsunamis, bird flu, currency turmoil, Y2K, droughts, the hole in the Ozone layer, Syria, Ukraine. The list is endless. Add to that constant predictions of food and energy shortages, the end of fossil fuels, overpopulation, global warming, and you would be forgiven for thinking economic stalemate at worst would be the result. No wonder over half of folk's invested wealth has stayed in deposits, even though over the last 5 years Deposits have earned less than nothing after tax and inflation.
Did you know that arch pessimist and often quoted Paul Ehrlich as far back as 1968 predicted by 1989 65 million Americans would die of starvation? And he estimated by 1989 the US population would fall to 23 million. Today it's about 320 million! And 25 years ago it was predicted within 10 years the Earth's climate would be warmer than it's been in 100,000 years, ignoring the 11th and 12th centuries when it was so warm you could grow vines in Scotland. Oil in the UK and US was to all but disappear it was confidently reported. And physicists agreed our temperature by 2000 would rise 7 F, sea level would rise 10 ft, so it would be goodbye New York and Washington.
All nonsense of course. World GDP has steadily increased. In 25 years US GDP has risen over threefold, Germany's 2.6 times, UK's 2.8 times, Russia fourfold would you believe, and China a staggering 27 times. There are now over 7 billion of us on the planet, no sign of food shortages yet, and Oil and Gas is still being discovered in ever increasing quantities. If you get a chance Google Backen North Dakota for a glimpse of what's really happening.
As to Stockmarkets in our " no hope" Britain from 1989 we've seen the total return FT all share Index (with reinvested income) increase by over seven and a half times, or about 8.5% pa, free of personal tax if in PEPs/ISAs over the period. That's doubled the savings of optimists every eight and a half years.
And now it's another Summer. The gloomies are out in force yet again. Global warming is still hitting the headlines, but if you'd like to read alternative views CNN or BBC don't allow anymore ...google Matt Ridley. Aye, today we're in a bubble they say. No evidence of that over the last 12 months in Stockmarkets or asset prices. However a wee fall in Stockmarket values wouldn't go amiss to keep the pessimists happy and wrong. But for those of us prepared to recognise there's 2 sides to every story , and not prepared to allow our old age to come along itself ...without decent wealth built up to enjoy it, I bet the next 25 years will be as profitable for optimists saving in tax free real assets as the last 25 have been ..... as my grannies also were fond of saying .... "onward and upwards"!
Award Winning Independent Financial Advisers
Authorised and Regulated by the Financial Conduct Authority