If I were asked to summarize what I have learned from my education and life experience, I would say that optimism is the only realism since it's the only thing congruent with reality.
Upon viewing my family history and the history of our country through an economic and humanitarian perspective, it's impossible to assume otherwise; let's take a moment to examine history by stepping back two generations to understand such an assertion.
My paternal grandfather, born in 1890, was born when America was an agrarian society.
At that time 50% of all workers engaged in food production, 50% of all homes had no running water, and just over 33% of the population had, at minimum, a high school diploma.
The equine economy boomed since the model T was merely an imagining of Henry Ford's; there were no radios, and one's life expectancy was the ripe old age of 49.
Moving forward forty years, my father was born when automobiles and machinery were commonplace: everyone had a radio, and traditional farm life began to fade rapidly.
The Panama Canal was built, the use of horses was no longer a standard, and Edison invented everything from the phonograph to the light bulb.
America had fought in WWI and won, and our country had raised health standards considerably thereby expanding life expectancy.
Interestingly, during my grandfather's time, few people wanted to invest in America or the American economy.
At that time the wheat thrasher was produced and this signaled the beginning of the end for the majority of the farm working population.
The time needed to produce a bushel of wheat went from 15 hours to 5 hours.
Since fewer farmers were needed, job loss resulted, and such jobs couldn't be regained.
Farm productivity skyrocketed as did the production and use of industrial machinery.
Large portions of the population consisted of displaced farm workers which served as an ample and ready labor force.
These jobless farm workers migrated to big cities and provided labor for growing factories.
Nevertheless, the crash of 1889 and the absence of modern markets cast a shadow over investing ventures in America.
In 1890, it was truly an exciting time for our great nation.
New inventions eased daily life and the affordability of new inventions made them accessible to many Americans.
The hand-wringer washing machine, vacuum cleaners, electric street cars, light bulbs and other technological breakthroughs were as exciting to American's in 1890 as advances in nanotechnology are to us today.
However, most Americans at that time couldn't see past the obstacles and embraced negatives instead; they forgot that "optimism is the only realism.
" The hesitancy to invest in America and the economy persisted during my father's time too.
In 1930, just ten months following the stock market crash of 1929, our federal government, and the Federal Reserve Bank made a series of disastrous decisions which led to the Great Depression.
Present day economists, after examining the consequences of the 1930s depression, agree that the depression, unlike others preceding it, was worsened by the abysmal decisions of two presidents and the central bank.
When my father was born, the negative viewpoints continued and intensified as it was coupled with economic pain.
The Great Depression was real, painful, and distressing for many, and such pain has proved enduring as it still affects the children of the survivors of the depression era.
The depression myths, not truths, were passed from one generation to the next, and investment decisions are based upon such myths.
Today, adults nearing retirement are remembering the myths taught to them as children and continue to make investment decisions based on bad memories.
In the 1920s, Americans enjoyed boom times due to tremendous productivity increases in both industry and agriculture.
The increases were due to technological advances and improved techniques of production.
In four decades, America witnessed farmers migrate to cities, homes being lighted by kerosene to homes being lighted by electricity, and the decline in food costs.
Innovations that eased modern life were taken for granted, and children were permitted to remain in school because families didn't require them to work to financially survive.
Seemingly, this would have been an ideal time to invest? Yet, many Americans didn't invest, which proved to their detriment, since lingering fears from the 1930s depression remained pervasive.
During the first two years of my father's life the equity market declined 89%.
Nevertheless, if half of one's money was invested in bonds and the other 50% was put into equities and dividends were reinvested, in a period of seven years after the 1929 stock market crash, one's stocks would have equaled their bond values.
People forgot that "optimism is the only realism.
" For the first fifteen years of my father's life, Americans faced a prolonged depression and a World War that endured for seven years.
Caught up in all of the negatives society was enduring, people failed to invest appropriately.
If one had invested one thousand dollars on January 2, 1945 (the beginning of the modern day stock market), and maintained that investment, he or she would have an investment worth one million dollars today.
I can't help but think of returning GI's that had that type of money that they could have invested after returning from WWI; it begs the question: how many of them would be millionaires today after making a single investment? My grandfather was born during the horse and buggy days, and I am his only grandson sharing his name.
I was born in the space age, in 1957, and I was born the same year that the Sputnik and Voyager were launched.
At that time, all homes had indoor plumbing, and many diseases were already cured; while my mother had an infant brother who died from scarlet fever, I never know anyone who did the same in my lifetime.
I remember lining up with my sister for the polio vaccine on a periodic basis, and Penicillin handled many other illnesses that at one time killed people.
We had radio, and television, and still few people wanted to invest.
The public focused on news headlines and forget the fact that "optimism is the only realism.
" In 1957, the cold war with the Soviet Union was one of the highlights of the year.
The Soviets launched Sputnik, and America was delayed in launching their own satellite.
In 1957, it was a year after the Soviets invasion of Hungary, a few years after the Berlin Airlift, and a few years after the Korean War.
In 1957, we had plenty of nuclear missiles aimed at one another in order to destroy the entire world.
By mid 1957, the economy had slowed, and nobody wanted to invest given the circumstances.
Again, optimism for investments was cast aside.
Yet, what would have happened if an individual had invested? The day I was born the S&P 500 closed at 47, and the nation GNP was 466 billion.
I graduated from high school in 1975 and on that day the S&P closed at 95, and the nation GNP was 1.
6 trillion.
Both of the latter had nearly doubled, just in my short lifetime.
Interestingly, few people really wanted to invest in 1975 either.
At that time, America had just endured a painful recession the year prior, we were two years past the first oil embargo and the discovery that the majority of our oil was derived from overseas, and we had just finished the last vestiges of wage and price controls with double digit inflation as its disastrous consequence.
President Nixon, disgraced, resigned from the presidency and America was beginning to feel the pressure from foreign industrial competition.
Ironically, most people knew nothing about the technological innovation of the micro compressor in 1973: an innovation behind nearly every technological breakthrough in the past three and a half decades.
Even if the discovery was common knowledge, it would have swayed few people to be optimistic and invest.
My son was born on December 27, 1979 and on that day the S&P closed at 107 and the nation GNP was about 2.
6 trillion.
The march of capitalism caused the market to increase by one-third since the time I had graduated from high school.
Still, newspaper and media headlines steered people away from making sensible investments.
America had hostages in Iran, we were dealing with inflation, and interest rates were at double digit rates.
Our economy contracted and our country felt the threat from overseas companies that threatened to swallow up American companies.
At that time, bank CD's were paying 14% so the notion of investing was, again, cast aside by many Americans.
Yet, if one had decided to ignore negative headlines and to be optimistic about investment ventures, what might have happened? On June 22, 2008, Alexis Ann Pope, my first grandchild and my greatest blessing, was born.
If an American had invested in 1979, by the year my grandchild was born would have proved financially fruitful for him or her.
From 1979 to 2008, the S&P 500 had gone from 107 to 1257; the GNP had grown to more than 14.
2 trillion, and a ten times increase was witnessed in stock prices and the economy witnessed in that small time period.
What caused this massive leap forward? The modern financial world had two births; that of the micro compressor in 1973, and on November 11th, 1989 when the Berlin Wall was destroyed.
In 1989, capitalism won, plenty won out over want, freedom over oppression, and economic growth began to spread globally.
The most populous country in the world began to see the embrace of free markets before they themselves became a collapsed Soviet Union.
The byproduct of this engine of opportunity was growth and America was at the forefront.
Once the word gets out, people will choose plenty over want and freedom over oppression.
Thus, liberal/collectivist policies in America and communism in the dictator's part of the world were doomed to failure.
Man will forever choose to make his own destiny as surely as our founding fathers began this great land for similar reasons.
Man is born with certain inalienable rights, among them life, liberty and the pursuit of happiness.
Forget the headlines and remember the facts: "optimism is the only realism, because it's the only thing that squares with reality.
"
Upon viewing my family history and the history of our country through an economic and humanitarian perspective, it's impossible to assume otherwise; let's take a moment to examine history by stepping back two generations to understand such an assertion.
My paternal grandfather, born in 1890, was born when America was an agrarian society.
At that time 50% of all workers engaged in food production, 50% of all homes had no running water, and just over 33% of the population had, at minimum, a high school diploma.
The equine economy boomed since the model T was merely an imagining of Henry Ford's; there were no radios, and one's life expectancy was the ripe old age of 49.
Moving forward forty years, my father was born when automobiles and machinery were commonplace: everyone had a radio, and traditional farm life began to fade rapidly.
The Panama Canal was built, the use of horses was no longer a standard, and Edison invented everything from the phonograph to the light bulb.
America had fought in WWI and won, and our country had raised health standards considerably thereby expanding life expectancy.
Interestingly, during my grandfather's time, few people wanted to invest in America or the American economy.
At that time the wheat thrasher was produced and this signaled the beginning of the end for the majority of the farm working population.
The time needed to produce a bushel of wheat went from 15 hours to 5 hours.
Since fewer farmers were needed, job loss resulted, and such jobs couldn't be regained.
Farm productivity skyrocketed as did the production and use of industrial machinery.
Large portions of the population consisted of displaced farm workers which served as an ample and ready labor force.
These jobless farm workers migrated to big cities and provided labor for growing factories.
Nevertheless, the crash of 1889 and the absence of modern markets cast a shadow over investing ventures in America.
In 1890, it was truly an exciting time for our great nation.
New inventions eased daily life and the affordability of new inventions made them accessible to many Americans.
The hand-wringer washing machine, vacuum cleaners, electric street cars, light bulbs and other technological breakthroughs were as exciting to American's in 1890 as advances in nanotechnology are to us today.
However, most Americans at that time couldn't see past the obstacles and embraced negatives instead; they forgot that "optimism is the only realism.
" The hesitancy to invest in America and the economy persisted during my father's time too.
In 1930, just ten months following the stock market crash of 1929, our federal government, and the Federal Reserve Bank made a series of disastrous decisions which led to the Great Depression.
Present day economists, after examining the consequences of the 1930s depression, agree that the depression, unlike others preceding it, was worsened by the abysmal decisions of two presidents and the central bank.
When my father was born, the negative viewpoints continued and intensified as it was coupled with economic pain.
The Great Depression was real, painful, and distressing for many, and such pain has proved enduring as it still affects the children of the survivors of the depression era.
The depression myths, not truths, were passed from one generation to the next, and investment decisions are based upon such myths.
Today, adults nearing retirement are remembering the myths taught to them as children and continue to make investment decisions based on bad memories.
In the 1920s, Americans enjoyed boom times due to tremendous productivity increases in both industry and agriculture.
The increases were due to technological advances and improved techniques of production.
In four decades, America witnessed farmers migrate to cities, homes being lighted by kerosene to homes being lighted by electricity, and the decline in food costs.
Innovations that eased modern life were taken for granted, and children were permitted to remain in school because families didn't require them to work to financially survive.
Seemingly, this would have been an ideal time to invest? Yet, many Americans didn't invest, which proved to their detriment, since lingering fears from the 1930s depression remained pervasive.
During the first two years of my father's life the equity market declined 89%.
Nevertheless, if half of one's money was invested in bonds and the other 50% was put into equities and dividends were reinvested, in a period of seven years after the 1929 stock market crash, one's stocks would have equaled their bond values.
People forgot that "optimism is the only realism.
" For the first fifteen years of my father's life, Americans faced a prolonged depression and a World War that endured for seven years.
Caught up in all of the negatives society was enduring, people failed to invest appropriately.
If one had invested one thousand dollars on January 2, 1945 (the beginning of the modern day stock market), and maintained that investment, he or she would have an investment worth one million dollars today.
I can't help but think of returning GI's that had that type of money that they could have invested after returning from WWI; it begs the question: how many of them would be millionaires today after making a single investment? My grandfather was born during the horse and buggy days, and I am his only grandson sharing his name.
I was born in the space age, in 1957, and I was born the same year that the Sputnik and Voyager were launched.
At that time, all homes had indoor plumbing, and many diseases were already cured; while my mother had an infant brother who died from scarlet fever, I never know anyone who did the same in my lifetime.
I remember lining up with my sister for the polio vaccine on a periodic basis, and Penicillin handled many other illnesses that at one time killed people.
We had radio, and television, and still few people wanted to invest.
The public focused on news headlines and forget the fact that "optimism is the only realism.
" In 1957, the cold war with the Soviet Union was one of the highlights of the year.
The Soviets launched Sputnik, and America was delayed in launching their own satellite.
In 1957, it was a year after the Soviets invasion of Hungary, a few years after the Berlin Airlift, and a few years after the Korean War.
In 1957, we had plenty of nuclear missiles aimed at one another in order to destroy the entire world.
By mid 1957, the economy had slowed, and nobody wanted to invest given the circumstances.
Again, optimism for investments was cast aside.
Yet, what would have happened if an individual had invested? The day I was born the S&P 500 closed at 47, and the nation GNP was 466 billion.
I graduated from high school in 1975 and on that day the S&P closed at 95, and the nation GNP was 1.
6 trillion.
Both of the latter had nearly doubled, just in my short lifetime.
Interestingly, few people really wanted to invest in 1975 either.
At that time, America had just endured a painful recession the year prior, we were two years past the first oil embargo and the discovery that the majority of our oil was derived from overseas, and we had just finished the last vestiges of wage and price controls with double digit inflation as its disastrous consequence.
President Nixon, disgraced, resigned from the presidency and America was beginning to feel the pressure from foreign industrial competition.
Ironically, most people knew nothing about the technological innovation of the micro compressor in 1973: an innovation behind nearly every technological breakthrough in the past three and a half decades.
Even if the discovery was common knowledge, it would have swayed few people to be optimistic and invest.
My son was born on December 27, 1979 and on that day the S&P closed at 107 and the nation GNP was about 2.
6 trillion.
The march of capitalism caused the market to increase by one-third since the time I had graduated from high school.
Still, newspaper and media headlines steered people away from making sensible investments.
America had hostages in Iran, we were dealing with inflation, and interest rates were at double digit rates.
Our economy contracted and our country felt the threat from overseas companies that threatened to swallow up American companies.
At that time, bank CD's were paying 14% so the notion of investing was, again, cast aside by many Americans.
Yet, if one had decided to ignore negative headlines and to be optimistic about investment ventures, what might have happened? On June 22, 2008, Alexis Ann Pope, my first grandchild and my greatest blessing, was born.
If an American had invested in 1979, by the year my grandchild was born would have proved financially fruitful for him or her.
From 1979 to 2008, the S&P 500 had gone from 107 to 1257; the GNP had grown to more than 14.
2 trillion, and a ten times increase was witnessed in stock prices and the economy witnessed in that small time period.
What caused this massive leap forward? The modern financial world had two births; that of the micro compressor in 1973, and on November 11th, 1989 when the Berlin Wall was destroyed.
In 1989, capitalism won, plenty won out over want, freedom over oppression, and economic growth began to spread globally.
The most populous country in the world began to see the embrace of free markets before they themselves became a collapsed Soviet Union.
The byproduct of this engine of opportunity was growth and America was at the forefront.
Once the word gets out, people will choose plenty over want and freedom over oppression.
Thus, liberal/collectivist policies in America and communism in the dictator's part of the world were doomed to failure.
Man will forever choose to make his own destiny as surely as our founding fathers began this great land for similar reasons.
Man is born with certain inalienable rights, among them life, liberty and the pursuit of happiness.
Forget the headlines and remember the facts: "optimism is the only realism, because it's the only thing that squares with reality.
"