Just over nine months ago, we were wishing 2020 ‘good riddance’, and looking forward to a better 2021, on the basis that COVID would be gone, or managed, and life would be back to some sort of normal.
But, in late September 2021, I write this as one of the 60% of Australians in lockdown.
We look enviously to our west, north and far south, as Western Australia, South Australia, the Northern Territory, Queensland and Tasmania live, relatively restriction-free, though even there travel restrictions remain in force.
(Gotta say, though, for those in the East pointing to WA residents ‘struggling’ through lockdown as a reason to lift restrictions… the AFL grand final didn’t exactly look like a bunch of miserable West Australians miserable at their plight!)
Of course, the restrictions nationally, though not ideal, are a helluva lot better than the alternative. And Australians should be bloody proud of ourselves for getting vaccinated in large numbers.
(If you can, but you haven’t, please go get jabbed (after appropriate medical advice, of course. I’ve had mine, and my 5G reception has never been so good. I dream about Bill Gates a lot, too. But I’m sure those side effects will fade. Seriously, just get vaccinated, please.)
But back to my theme. Or, more accurately, on to my theme.
See, the headlines are full of bad news. And it’s bad. Too many people are sick, or have died. Too many are recovering, or grieving friends and family no longer with us.
I don’t want to detract from that, or to pretend that’s not the worst thing that’s happened to those people.
And God knows we owe our scientists, medicos and emergency services personnel a debt we’ll never repay. They remain stretched, tired, yet soldiering on. Thank you!
But I do want to also take some time to count our blessings.
It is the way of humanity that we notice (and remember) the big, bad, ugly stuff.
We tend not to notice the small, regular, improvements that compound day after day, year after year.
As Stephen Pinker told Radio Free Europe:
“Those are undoubtedly threats to progress, and it’s essential to realise that progress does not mean that everything gets better for everyone, everywhere, all the time. That would be a miracle, that wouldn’t be progress. And there are definite threats to progress.
It’s important not to let your view of the world be influenced by headlines — because they report isolated incidents — but to look at counts that add up all of the countries that have moved in one direction or another.”
That applies doubly — and more regularly — to investors.
I wrote last week about the risks that continually appear to threaten stock market progress.
The latest one is the Evergrande sage (the company is a large Chinese property developer, if you missed the news).
It’s the latest, but it won’t be the last.
Meanwhile, Woolworths Group Ltd (ASX: WOW) sold groceries all weekend. BHP Group Ltd (ASX: BHP) mined iron ore. Harvey Norman Holdings Limited (ASX: HVN) sold tellies, computers, beds and couches. CSL Limited (ASX: CSL) created more blood plasma products. Seek hosted more job ads.
Did you read about any of that? Me either.
Not that it should be reported, necessarily, but the fact that it wasn’t — and Evergrande was — impacts our brains in unfortunate ways.
We overweight the latter and forget about the former. We know it’s true, of course; we just tend not to account for it.
In stock market terms, the headline that should, by rights, lead every day is “Businesses get a little bit better, again”
In the main section of the paper, the first few pages should be filled with ‘Humans live a little longer’, ‘A few more people got out of poverty, today’, ‘Cars just got safer, again’ and ‘Computing power got even better, for less, again’.
Sport, of all things, perhaps gets it most right. The sports reporters get to write about yet another world record broken, almost like clockwork. It is a neat analogy for life (and we actually pay attention to that, in the same way we should — but don’t — to numbers released by the Australian Bureau of Statistics).
The ABS, itself, is both a victim to, and part of, the problem. The data it focuses on is the change in national data from month to month or this year versus last year.
And, to be fair to the ABS, that’s its role, and its data is used by policymakers and businesses to plan their immediate futures.
But if and when we give extra funding to this vital body (and we should), one of the first things I’d task them with is to prepare and publicise some longer-term data series.
Looking at things like life expectancy, national income, jobs numbers and standard of living (measured not just in how much money we get, but also what we get for our money) would remind us all of the progress we’re making as people and as a country. The same would be true for the rest of the world, too.
(One of the things we most overlook, when it comes to standard of living, is not just how much stuff we get for our money, which is the usual way people think about it, but how good those things are. A Toyota Camry probably costs about the same as it did twenty years ago, yet the hugely improved fuel economy, the vastly improved safety features and the big jump in standard in-car equipment aren’t captured by the stats. The same is true for computers, phones (including data plans) and lots more!)
Bottom line: The bad stuff gets the headlines. Most, as I said last week, don’t happen. But even when the bad things do come to pass, they are the exceptions that prove the rule of continued human improvement.
Yes, we need to strive to do even better. We need to constantly address things like inequality, other social impacts, and environmental damage.
But the presence of bad news, or imperfect outcomes, doesn’t invalidate the long term arc of improvement.
Yes, even in a year partly wrecked by COVID, things continue to improve. Not every day. Not for everyone. But overall. The march of human progress continues.
If you’ve had a tough 2021, I hope that gives you a reminder to hold on to hopes of better times ahead. And if you’ve been lucky enough to do well this year, I hope it’s a reminder that plenty of people haven’t been so fortunate.
But, overall, I want you to remember that, throughout history, optimism has been the right approach. Over time, through our collective efforts and despite the mistakes, missteps and (still) unaddressed failures, things get better.
It would be a brave person to believe that multi-millennium trend is going to reverse any time soon.
And, as an investor, I wouldn’t bet against it, either.
We have some challenges. We need to address them.
But overall, as a species, we’re far from done. And I’m investing accordingly.