Long before our literary purchases arrived on doorsteps via post-drop or drone delivery from Brazilian river Inc., and Kindling was anything other than a fire starter, we roamed a bricks and mortar world of A.M. milk drops, VHS rentals, smoking on planes and multitudes of bookshops.

And during that circa 1970s to 1990s stroll, my life involved a lot of airports; when I had the pleasure of waking at the sparrow’s fart to catch the “red eye” to London in search of friendly financial journalists.

All that hanging about amongst planes afforded me some extra Terminal-based browsing time to find interesting books, which is how I stumbled across “The Age of Unreason” by Professor Charles Handy in 1991.

In it Handy foresaw dramatic changes transforming business, and predicted “the virtual disappearance of lifelong, full-time jobs.”

It was thought-provoking stuff.

Frogs & Hot Water

By his own example, he explained how he left University and got a job in a Plc within a specialist division and was then posted to a foreign subsidiary. But by 1989 not only had the division gone, but so had the Plc, and even the country in which that subsidiary was operating!

Viewed in a broader example; of the Fortune 500 firms in 1955 vs. 2011, 87% of them are gone.

What Handy suggested is that “discontinuous change” (non-incremental, sudden change) would require what he called “upside-down thinking” (looking at things in a totally different way), especially in work and business.

Now, most of us will have heard of the “boiling frog” premise; where a frog doesn’t detect gradual temperature changes and thus will happily sit in a pan of water that’s slowly brought to the boil, until such time as Kermit has kicked his mortal coil, so to speak.

Handy used that boiling frog idea to show how the fate of any business, no matter how large, relies upon waking up to the unprecedented rate of global change…or get boiled by it.

Saving & Remembering

We can see this reality happening in the savings industry.

Think about it: How many Life Assurance Mutuals founded in the early to mid 19th Century remain?  What happened to our traditional Final Salary Pension Schemes? That’s a relatively quick extinction for once thriving sectors.

Now, consider all the other businesses that once sat happily in the slowly boiling water but have now vanished.

What lesson can we take from upside down-style thinking about the consensus belief that the world is in danger of yet another stockmarket crash or recession at any moment, and how do we respond to rapid change in communications technology that creates negative sentiment from non sequiturs?

And to that end how many investments have been “boiled” down to zero or even negative returns by knee-jerk reactions to those invalid arguments?

Well, maybe we can start the healing by remembering.

Every 1929…

We’re well-placed to think how about the last ten years alone, and the arrival of quantitative easing (QE), was roundly predicted to result in hyperinflation, and that its demise would then lead to a stock market crash.

It didn’t.

Equally, we should keep front-of-mind all of those bond fund, cash ISA and deposit account “adverts” that have arrived in the form of scary headlines to suggest yet another imminent 1929-style crash is upon us, often predicated on a single chart alone.

It wasn’t.

And what of things like the predictions that the PIIGS and their economic muddles were set to topple Europe and the world, of Japan’s impending superpowerdom, the lights-out US economic budget decisions, the Fiscal Cliff or Mayan Calendar?

They’re all gone.

Lest we forget all of those presumed Armageddons; spat out by experts and their gimp-like algorithms boasting ninetieth percentile (plus) accuracy, that resulted in zero-sum truths.

Did oil ever get to $250 a barrel, Gold go to $5000 an oz, the FTSE drop down to 500, or the Dow Jones Index fall to 1000?

Now move a bit further backward and remember the global consensus of experts telling us planes would fall out the sky thanks to the Millennium Bug…

Floating Sideways

The truth about these things isn’t inconvenient to anyone other than the “experts”  who predicted them, and of course those who fretted their arrival, or worse, lost out financially because they listened.

Those offenders experts expect our memories to remain as silent as their missing apologies for all that gloom and doom that’s now floating sideways on the other side of the global economic goldfish bowl.

That, and the hope we will resign ourselves to blaming every now for what happened in the past, and keep faith in the slate-cleaning short-termism of confirmation and recency bias, and the Eve’s apple of information overload.

It’s so much easier to just “Fuhgeddaboudit…”

Comment from Jeff Miller at Dash of Insight
On 22 April 2018

“Dash of Insight - Weighing the Week Ahead
The Costly Quest for Fresh Fears
22 April 2018
By Oldprof
Insight for Investors
Investors should have a long-term horizon. They can often exploit trading volatility! I remind investors of this each week, but now is the time to pay attention.
Best of the Week
…… Runner-up for BOTW is Alan Steel’s ( tirade. He captures what I am trying to say here in fewer words, and much more colorfully.
He recounts the failed predictions about QE, the PIIGS, Japan, US budget decisions, the fiscal cliff and the Mayan Calendar. ……”

Article courtesy of HNW Magazine
April 2018

Alan Steel
This article is the personal view of Alan Steel. Please check the appropriateness to your individual position with your advisor before taking or refraining from any action.

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