Won’t Get Fooled Again
“We’ll be fighting in the streets
With our children at our feet
And the morals that they worship will be gone.
And the men who spurred us on
Sit in judgement of all wrong
They decide and the shotgun sings the song”
-The Who, “Won’t Get Fooled Again”
Lyrics from my adolescence ring in my head sometimes, as these days remind me more and more of the 1970s (at least what I can remember of them). The very recent bank failures force me to think back to the S&L crisis, when nearly 35% of the 3300 Savings and Loan Banks failed from 1986 until 1995. What happened? The 70s happened (slow growth, high inflation, gas lines, malaise), remember? Government regulations, then deregulation, until of course good old corruption and fraud brought down the S&Ls.
Then came the Reagan revolution, the Volker fed, and a whole new era of “business is back baby”. The stock market took off like a rocket with the nifty 50, the semiconductor era began, and life as we knew it was over. The new guard had arrived with their mobile phones (Gordon Gecko on the beach with his monster-sized satellite phone), junk bonds and Michael Milken, and the rise (and fall) of Steve Jobs and Apple.
The old guard from the 70s were done, and the new crowd had it all figured out. A “new revolution” was beginning…..
“I’ll tip my hat to the new Constitution
Take a bow for the new revolution
Smile and grin at the change all around.
Pick up my guitar and play
Just like yesterday.
Then I’ll get on my knees and pray
We don’t get fooled again”
Ahhh the 90s. All seemed right in the world. The cold war was over, and America was back in charge. Innovation was happening at every corner – Chicken McNuggets, artificial hearts, DNA, Prozac, Windows, personal computers, Walkman, texting, play stations, Google, the DVD. So much so fast, and so much to digest into our culture.
Money was flying into technology, and the NASDAQ continued to dominate, with Microsoft, Cisco, Qualcomm, and others (even Pets.com). The mania was driving decision makers to agree that “this time it’s different”, and you know what happened next.
The NASDAQ declined as follows: 2000 (39%), 2001 (21%), and 2002 (32%). The next new high would be in November 2017. If you invested in late 1999, it took you 18 years to get back to even.
“A change, it had to come
We knew it all along
We were liberated from the fold, that’s all.
And the world looks just the same
And history ain’t changed
‘Cause the banners, they all flown in the last war”
So we slogged through and learned some hard lessons – again. We would never trust the knuckleheads that sold us this pie in the sky. We would move on ahead, and maybe even save for the American dream, a house with a yard and a two-car garage. We would be prudent, never go back to the false promises of easy money.
Then came the “great financial crisis”.
“There’s nothing in the street
Looks any different to me.
And the slogans are effaced, by-the-bye
And the parting on the left Is now parting on the right
And the beards have all grown longer overnight”
Which brings us right back to today. Bitcoin because we don’t trust anybody, EVs because we don’t want fossil fuels, and SPACs because, well, I have no idea. But it’s a new revolution. We don’t need government meddling in our lives or businesses.
At least until my bank fails. Then the revolution begins again. I guess Pete Townsend had it right all along. Meet the new boss, same as the old boss.
“I’ll tip my hat to the new Constitution
Take a bow for the new revolution
Smile and grin at the change all around.
Pick up my guitar and play
Just like yesterday.
Then I’ll get on my knees and pray
We don’t get fooled again.
Meet the new boss
Same as the old boss”
Solomon knew this even some 13,000 years ago, as he wrote in Ecclesiastes: “What has been is what will be, and what has been done is what will be done, and there is nothing new under the sun.” (1:9)
Mark Twain is also attributed as saying, “History doesn’t repeat, but it rhymes.”
There should always be a competition for capital, whether in the marketplace, or in your own portfolio. Keep your eyes open, as “new revolutions”, while not new, can bring opportunity for reward and risk. It appears the new boss, same as the old boss, has arrived.
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