In this episode I unravel the fabric of the 1970s—a decade of economic turmoil—and extract the golden threads of wisdom that are just as relevant to today's investor. We'll challenge the fallacy that "this time is different," shining a light on the enduring power of human ingenuity and the resilience of the market. It's a story that celebrates the remarkable ability of great companies to thrive amid uncertainty, and it's a story that I can't wait to share with you.
I'm genuinely thrilled to bring these historical insights to life, insights that empower us to craft investment strategies with a newfound confidence. By understanding the past, we pave the way for a future where our investments reflect the robustness of human progress, not the shadows of fear. So, come along and let's embrace the wisdom of history together—your financial peace of mind might just be a podcast episode away.
"The minute we decide to sit this one out or wait and see, or look for an all clear signal, we begin to fall behind."
"There is real suffering in the world. The headlines will always capture the current gathering darkness, but don't make the mistake of believing that the darkness any of it can overwhelm the inconceivable progress that's being made at the great companies of the US and the world all the time."
"The price is up 45 times because the earnings are up 40 times and the dividends are up 22 times, versus inflation, which is only up eight times in the same period."
This podcast uses the following third-party services for analysis:
Chartable - https://chartable.com/privacy
Transcripts
::
Everywhere there was a gathering darkness, there was nowhere to hide from it. The reality is, the darkness is always screaming. It is always there and screaming is all it knows how to do. From within the darkness, progress is inconceivable. It's laughable. Even when every minute of every day is filled with catastrophism, it's impossible to see the power of human ingenuity at work For our purposes. Nothing captures this power, human ingenuity, better than the ownership of the great companies of the US and the world.
::
Do you think money takes up more life space than it should? On this show, we discuss with and share stories from artists, authors, entrepreneurs and advisors about how they mindfully minimize the time and energy spent thinking about money. Join your host, jonathan DiYo, and learn how to put money in its place and get more out of life.
::
Hey there, welcome back to the Mindful Money Podcast. Today we're continuing my love affair with the great companies of the US and the world. Two weeks ago we talked about two things. First, we talked about the fact that wealth is created by owning great businesses and second, we introduced this idea of the gathering darkness all the reasons people decide not to own or own less of the great companies of the US and the world. Last week we talked about how the words we choose to describe the ownership of the great businesses can affect how committed we are to owning them.
Today our topic is the investing benefits of an adult memory. So humans are incredible adapters. It is the ability to adapt that's made us such a successful species. Only important adaptation strange as this is going to sound is memory loss.
Most people associate forgetfulness with frustration, but forgetting also serves some very important functions necessary for human survival. According to Simon Norby, limited access to negative memories supports our ability to regulate emotions. Forgetting enables us to return to our bright and cheery selves after successive periods of this gathering darkness. Despite this natural flushing of historical memories, we probably succumb to the weight of it all and be unable to leave our homes. But forgetting also creates a mistaken view of history. Because we don't remember the challenges we've overcome. We begin to see each challenge as something special and unique. Our brains trick us into believing that this time is different. So when the pundits tell us this time is different, it's easy for us to agree without much examination. We form a generalized belief that today's uncertainty will pass and become tomorrow's certainty, because we don't see today for what it is, just another period of the gathering darkness, inextricably linked to the infinite series of prior gathering darknesses. This is a terrible setup when it comes to our experience of markets and investing, because we think there are periods of calm and joy and certainty in markets and those are the periods that experience great returns. This isn't true. Nothing could be further from the truth. The market climbs the proverbial wall of worry. As we analyze returns over time, we see that there are periods with horrible headlines and great returns and periods with great headlines and horrible returns. Returns do not correlate with headlines. They don't correlate with much of anything but with any kind of regularity.
The minute we decide to sit this one out or wait and see, or look for an all clear signal, we begin to fall behind. We don't actually move from periods of uncertainty to periods of certainty or anything like that. We move from one uncertainty to the next without ever really knowing the consequences of the former or the causes of the latter. Meanwhile, our brains cobble together some muddled version of a shared history that enables us to make sense of our surrounding and cope with the vastness of the uncertainty. We desire a certainty we can't have. So our brains revise our histories to give it to us.
an adult memory. The year was:
always presses its case in a:
tory the first five months of:
,:
Going into:
negotiated monetary order. In:
Is stuff going to spin off into space or is stuff going to stay, you know, attached to the planet? Everyone was just forced to watch and see. No one had any idea what was going to happen. It was an insane experiment that we had no choice but to undertake. I want you to imagine the headlines during this period. Imagine the news punditry, which were thankfully much smaller at that time.
ing news and the crosstalk of:
Everywhere there was a gathering darkness. There was nowhere to hide from it. The reality is the darkness is always screaming. It is always there and screaming is all it knows how to do. From within the darkness. Progress is inconceivable. It is laughable. Even when every minute of every day is filled with catastrophism, it is impossible to see the power of human ingenuity at work For our purposes. Nothing captures this power human ingenuity better than the ownership of the great companies of the US and the world. Now the rest of the story. Anyone remember Paul Harvey's the rest of the story? Abc radio in the mid to late 70s. He would present little known or forgotten facts on different subjects. That's exactly kind of what we're doing today. At the same time these three stories were happening. Inconceivable progress is launching without any fanfare or appreciation, or even announcements.
he world was ensconced in the:
for:
If all you could see in:
If you want to develop your own understanding of our economic history, check out the resources tab on the Mindful Money website. Scroll down to the category Money History, where I've collected 10 of my favorite books on US financial history. While you're there, check out some of the other categories as well. The gathering darkness will always get the headlines. The inconceivable progress is always made invisibly. You got to be careful which one you allow to lead your portfolio. The gathering darkness suggests that perhaps bonds or cash are a good idea. History marked by the inconceivable progress suggest we should own more of the great companies of the US and the world. I hope you will join me next week as we give specific examples of great companies and their rational refusal to lose money, our money. Thanks for joining me today.
::
Thanks for listening. Full show notes for each episode, which includes a summary, key takeaways, quotes and any resources mentioned are available at Mindful Money. Be sure to follow and subscribe wherever you listen to your favorite podcasts and if you're enjoying the content and getting value from these episodes, please leave us a rating and review at RateThisPodcastcom forward slash mindful money. We'll be sure to read those out on future episodes.
