Inflation, Recession and a Frantic Bear Market…Again
Nick Murray recently published a note titled, Inflation, Recession and a Frantic Bear Market…Again.
The general idea is that we have been here before. Today’s crisis is not unprecedented and the same engine of progress that brought the stock market up 50x since this Life Magazine article was published continues to run at full speed, even though it may not feel that way from one day to the next.
My favorite part of the article is towards the end:
In 1970, just less than half the world’s population lived in extreme poverty, as measured by the World Bank. By 2018 that number was down to nine percent. (Again: perfectly unimaginable at the time.) And today, the Brookings Institution projects that between the years 2020 and 2030, some 1.6 billion people will enter the middle class in the emerging markets. That’s five times the current population of the United States. We are left to imagine—there’s that word again—what profit opportunities America’s leading companies may find in these developments. . . . . Might [these types of long-term trends] in fact turn out to be more important by an order of magnitude than how high the Fed raises interest rates in the coming months, or how low the S&P 500 before it finally bottoms?
The Power of Unimaginable Progress
When asked about Amazon’s long-term prospects, Jeff Bezos is quoted as saying, “Amazon is not too big to fail ... In fact, I predict one day Amazon will fail . . . Amazon will go bankrupt. If you look at large companies, their lifespans tend to be 30-plus years, not a hundred-plus years. My job is to delay that date by as long as possible.”
I’m not creative enough to imagine the type of progress that would dethrone Amazon, but I know it exists and that alone is enough to get me excited for the future. Because I’m confident Amazon won’t go out of business when customers begin to accept slower deliveries, higher prices, or less selection. That isn’t what happened to Sears, Blockbuster, Blackberry, or Kodak. Amazon will only fail because someone figures out a better way to do things. And when that happens, humanity, and most likely the stock market, will have benefited as a result.
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