Rational Optimism

As long term investors we must at our cores believe that, paraphrasing D:Ream, “things will eventually get better”.

Unless the course of human history changes this day, the weight of our collective wills unable to push the stone forward any further, then over time this optimism will surely serve us well.

We can know this and we can even believe it inherently. But the thing is, from time to time, it can be really bloody difficult to remember.

To be an optimist is to believe that the path ahead leads to prosperity. The rational part refers to the acceptance that there will naturally be some roadblocks along the way.

As a partial salve to the terrifying state of the world, this week’s post is illustrated by the good country of Norway, where we are currently on holiday. The place is like mouthwash for the mind.

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“O God,

Give us the serenity to accept what cannot be changed,

The courage to change what can be changed,

And the wisdom to know the one from the other.

Reinhold Neihbur - “The Serenity Prayer”

In the olden days, ploughing away in whatever field it was that you farmed, you only really knew the news and goings on in your local village. Every once in a while maybe, a traveller from another town or city paid a visit and then you got the low down on what was going on there.

Because we were all so disconnected from each other back then we only heard of catastrophic misfortune once in a blue moon. This was unless that particular piece of misfortune happened to take place in our village - and, fortunately, really bad things tend to happen less frequently than we expect.

When the internet arrived it changed everything - well, two things specifically. The first was that we were now all connected to each other in a way which had been unimaginable previously.

The second was that the traditional business model for media companies was killed forever. Commercial news organisations no longer needed to trade in a currency of credibility, clicks and eyeballs were the only metrics that mattered.

We’re human beings, we are naturally hard wired to look for danger and warn others. It is literally in our genes.

This genetic wiring ensures that bad news just attracts our attention in a way that good news never can. Bonus points if it is spectacularly bad news.

Knowing what we know now it seems darkly apt that the September 11th terror attacks, the most tragically visceral event of our times, took place in the immediate aftermath of the advent of the internet.

Here was a generation-defining event that felt less like news, and more like a film. The first, truly viral moment.

The way that we consumed news changed forever that day. Rolling twenty four hour news channels now record the very worst of human nature and scream outrage into our homes on an endless loop. It is no wonder we are all terrified.

I’m not arguing that we should blindly stick our head in the sand and pay these troubles no mind.

To do so would be unrealistic, callous even. There are awful problems in this world of ours’, and some of these problems will never really go away.

Over the past, even one hundred years human progress has been indescribable. Exponential. The collective has never been more prosperous than we are today.

And yet we continue to kill and maim each other in the name of some “cause”. Conclusion - it must be in our nature, and probably always will be until the day we are all floating brains in jars.

No, the rational optimist recognises the problems that she cannot change, resolves to focus on what she can and remains steadfast in her expectation that the will of the average person is honourable.

For this is surely the only logical conclusion. If our collective role in this world is not to leave it in a better place than we found it - then what is it exactly?

While some men want to see the world burn, the quiet majority yearn and toil for a better future.

Have a great weekend.