Mike Lipper’s Monday Morning Musings
New World Rediscovered
Editors: Frank Harrison 1997-2018, Hylton Phillips-Page 2018
Western Europeans Learn the World is not Flat
Mid-Eastern astronomers have known the world is not flat for
thousands of years. Copernicus also knew the truth, which most Europeans learned
from Columbus when he discovered the Caribbean islands in his search for trade
routes to India. The real value of the discovery led to obtaining Latin American
gold and silver for the Queen of Spain and her empire, which resulted in greater
gains than those possible from exporting Indian tea.
Quite possibly, a similar realization could occur from Donald
Trump’s attempt to solve US economic problems through changes in trade patterns
and tariffs, which could also lead to unexpected riches.
Many of our blogs attempt to help long-term investors and
their beneficiaries. However, a very high percentage of what the investment
community labels as investment research focuses on the short-term. For example,
in the latest week 17% percent of NYSE stocks traded on declining prices vs. 34%
on the NASDAQ. In the latest AAII sample survey 25% were bullish vs. 41% bearish.
This research may be useful for trading, but it would be meaningless in helping
generate capital to pay for college costs 20 years in the future, or to help provide
funding for new college dormitories or laboratories.
Demographic estimates ten to fifty years out are more likely
to be useful than current stock prices. One statistic I might find useful is
the percentage of recent graduates who make contributions to their college or the
college of their spouse. Tracking the growth of people in positions of
responsibility at work or in the community might also be of interest. The
percentage of students taking two or three years of foreign languages vs. students
taking “STEM” classes is another statistic I’d like to see.
Asking appropriate questions for the resolution you are seeking
is critical to charting a course toward the desired result. Failure to do so could
result in unanticipated outcomes which are not necessarily favorable to achieving
the desired outcome. It is equally important that questions address the
appropriate timeline for the investment. Not doing so could lead to a similarly
disastrous outcome. There could of course be an unanticipated favorable outcome
like Columbus’ gold and silver windfall, but those situations are rare occurrences,
unlikely to be repeated very often.
Closing questions for the week:
Healthcare costs are rising, can they be capped?
Can better education lead to better and cheaper healthcare?
Did you miss my blog last week? Click here to read.
Mike
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