History comes in waves. Photo by Elisabeth Dellinger.
Fragments of history are pouring through my head today. They always do when the world looks messy, and what a mess we have now. Dozens slaughtered in a Florida terrorist attack. An assassination in the UK, the first murder of an MP since The Troubles. Borderline fascist far-right parties on the rise throughout Europe. Increasingly vitriolic campaigns on both sides of the Atlantic. One of the 20th century's greatest political achievements at risk of fracturing. War and strife in Syria and Iraq, displacing more and more souls each day. Terrorism in Egypt, France, Belgium, Lebanon and Indonesia. Ceasefire violations in eastern Ukraine. An economic and humanitarian crisis in Venezuela. The drug war continually claiming casualties in Mexico. People losing faith in democratic institutions. Aspiring dictators flouting the rule of law. Human rights abuses. The entire world seems on knife’s edge, in need of a timeout. As markets react, I hear people ask: Has it ever been this bad? This much, all at once? And then, I think of history—from my own life and the books I’ve read. And from the sad truth comes comfort: It has almost never not been this bad, yet life goes on. We wake up, go to work, live, eat, laugh, love. Businesses continue. Economies grow. Markets survive. If recent news has you feeling blue, wondering how markets could ever withstand the storm, perhaps history can lift your spirits, too.
As Solomon wrote, there is nothing new under the sun. History might not repeat perfectly, but as the cliché goes, it rhymes. Freddie Gray, Michael Brown and too many others—and the related protests—are echoes of Rodney King, Eula Mae Love and Watts. Where today we have Orlando, San Bernardino and South Carolina, in the 1990s we had Columbine and 101 California. I’ll never forget February 16, 1988, when as a child I stood in front of the Sunnyvale Public Library, frightened and confused as police cars tore out of the lot across the street, racing to the ESL shooting. In history class we studied the upheaval of 1968—MLK, RFK, the Chicago Seven and so much more. Where boats ferry frightened Middle Eastern refugees across the Mediterranean to southern Europe, during World War II, the boats went the other way, carrying Europeans to safety in Syria and Egypt. And surely I needn’t remind you of Pan Am flight 103, Korean Air flight 007 or TWA flight 847. The settings, characters and motives change, but the basic plot doesn’t.
The history of the world is tragedy. But also, triumph. Triumph of the human spirit over adversity. Freedom over tyranny. Technology over toil. 400 miles north of the Watts riots, in 1965, Gordon Moore and the Intel lads were writing the future on a microprocessor. As war raged in Vietnam, Richard Branson opened his first shop. Tragedies mark our lives, giving us the where-were-you-when moments. They shape our worldview. I am who I am because I was a child of the Cold War. But over time, the good is what shapes markets. The Moores and Bransons of the world, building businesses and technology. Creating jobs and opportunities. Growing their companies and inviting investors along for the ride, to share in their spoils. It’s a beautiful thing.
Good times and bad are cyclical. Always have been. I was born in late 1981, during a bitter recession. Some of my earliest memories are from 1983, the Cold War’s last great nuclear scare. Air raid siren tests punctuated my childhood. The Pacific Fleet patrol squadron, stationed at nearby Moffett Field, was a fixture in the sky. I was too young to watch The Day After when it first aired, but its cultural impact filtered into my universe. Before I reached age five, I had a strong sense that the world could end. But then came Morning in America! A new optimism. Yuri Andropov was out, Mikhail Gorbachev was in. Margaret Thatcher said he was a man she could do business with. That was new! Things happened. Each computer my father brought home from work did more than the last one. Ronald Reagan stood at Brandenburg Gate and told Mr. Gorbachev to tear down that wall. Before I knew it, my mom was replacing the world map that hung by the kitchen table—the one with a massive Soviet Union dominating the upper right quadrant—with one that simply said, “Russia,” with a bunch of unfamiliar shapes around it. Azerbaijan. Ukraine. Georgia. A bunch of places that ended with “stan.” Poland was free. So was Romania. The iron curtain was gone, and a brave new world stood in its place.
But the triumph—symbolized forever in my mind by David Hasselhoff singing at the soon-to-fall Berlin Wall—soon gave way to strife. My country went to war—the first of my lifetime—in Iraq. It ended soon, but then came the first World Trade Center bombing. Waco. Oklahoma City. World news brought me images of Rwanda and the Manchester bombing. Bosnia and the horrors of Slobodan Milosevich. The word “refugee” entered my vocabulary as displaced souls from former Yugoslavia teemed through Europe. Yet today we recall the 1990s not just for their many horrors, but for their wonders and achievements. Galloping technology. The Internet. The Good Friday Accords. Astounding growth and history’s longest bull market. Judging from the numbers alone, you’d think the entire decade was one big party. But it wasn’t. Until euphoria took hold at the tail end, folks were mostly of a miserable mindset, discounting the fact the good was simply more powerful, economically, than the bad. That we think so fondly of the decade today is a example of how time and distance change our perceptions.
Nine months after the euphoria of the new millennium, I learned why tragedy doesn’t stop the world. Early one September morning, my roommate woke me up, screaming of terrorists and airplanes. I stumbled out of bed, switched on the TV, and we watched in horror as 9/11 played out before our eyes. The second plane hit. The towers fell. The stories poured in. I’ll never forget CNBC’s Ron Insana reporting live, covered in ash. It felt like the world had stopped, frozen in terror forever. But it hadn’t. Summer classes at UCLA weren’t canceled. My part-time job beckoned. So I set my jaw, grabbed my backpack and walked across Westwood to get on with life. I clocked in and did my work. So did my colleagues and everyone at neighboring businesses. And so it went, not just for us, but for all of America. Life went on because it had to. And once we realized it could, that was that. As the records now show, the recession that began the previous March ended two months later.
And so it remains. We hear of horrors, but unless our particular geography bears the brunt, our routines don’t change. We go to work—creating, making, thinking, helping, serving, healing. We shop, travel, eat. That activity, that human resilience, is what powers economies through.
Markets are resilient because the people who power them are resilient. Simple as that. Volatility is a constant and bear markets happen. But over time, stocks rise far more often than not because the human spirit triumphs far more often than not. Creation outlasts destruction.
Remember this whenever the news gets rough. As you go about your routine, remember most of the world is doing the same, and it will keep on turning and growing, and markets will carry on.