Having trouble remembering the name of this blog?
Simply type into your browser tiny.cc/riverbend


If you find the text too small to read on this website, press the CTRL button and,
without taking your finger off, press the + button, which will enlarge the text.
Keep doing it until you have a comfortable reading size.
(Use the - button to reduce the size)

Today's quote:

Wednesday, July 27, 2016

Daily Reckoning


A large part of my daily intellectual diet is reading The Daily Reckoning Australia. Today's newsletter includes a letter written a few months ago by their contributor Vern Gowdie to his children. I am reproducing it here because it is so full of truths and insights that it ought to be read by everybody. I'm sure Vern won't mind.

‘Dear girls,

‘Everyday I’m reminded about how different the world you are growing up in is to the one from my youth.

‘People taking photos of themselves in provocative poses hoping they will be liked by other self-absorbed wannabes…I don’t get it. In our youth these people were called “show offs” and were generally disliked for being “so far up” themselves. Yet today’s self-obsessed individuals can make a healthy living by getting enough brain dead people to follow them.

‘The abbreviation of the English language is another adjustment I’m still struggling with — thx, fyi, omg, lol. My Grade 7 English teacher — the one who taught us “the quick brown fox jumps over the lazy dog” — would be turning in his grave. Long gone are letter writing skills of yesteryear…commencing a letter with “Dear” and signing off with “Yours Sincerely”. Now, if you’re lucky, it is “Hi” and “Cheers”.

‘Skype and “WhatsApp” are fantastic ways to communicate with each other at no cost. What perplexes me is we don’t pay anything to use these applications yet the companies are valued in the billions of dollars. Either I don’t get it OR these companies are not worth what people think they are.

Twitter is another one I don’t get. Never used it and probably never will. I’d rather take your Mum for a coffee and have a chat. Maybe a few more people are opting to do the same because Twitter recently announced it’s laying off 300 people. This is a company worth US$20 billion and for every share on offer the earnings are MINUS US86 cents. Again I don’t get it.

‘I hear you talk about Instagram, Snapchat, Facebook and other forums you use to stay connected.

‘When you have time to actually meet these people I am not sure, but somehow it must work because coffee shops are full of young people…are they working (doing their next self-indulgent pose perhaps), going to Uni or living courtesy of the taxpayer? I don’t know, but they inhabit local cafes in their droves.

‘Then you read about sites like Tinder and Ashley Maddison where single, attached and married people can connect for some casual sex…just like that. What does that say about society’s moral compass? Again, I don’t get it.

‘The purpose of this letter was not to go on a rant (or at least not a complete rant) and confirm just how old-fashioned and out of touch I am. There are some things in this new world of technology that I admit don’t make sense to me, yet there are others I do comprehend.

‘It is these that I would like to share with you.

‘A large percentage of the population operate in a “head down, bum up” fashion. Swept along with the tide of life. Jobs to go to. Bills to pay. Courses to study for. Kids to educate. Careers to worry about. Relationships to manage.

‘Technology has made life easier in some ways, but busier in others. Because so much more can be done over the internet, we have come to expect more to be done. The demands keep escalating. Emails pile up. Text messages “bing” away at us. Photos demand to be liked.

‘All these forms of communication are constantly encroaching on society’s spare time.

‘Not having these distractions provides me with the luxury to read, reflect, comprehend and think.

‘Just because I “think”, it doesn’t mean my conclusions are right. Life can be very complex and throw up all sorts of surprises.

‘One of my warnings when it comes to investing is to be wary of projecting the past into the future. Life is dynamic and the influences that created certain past results may no longer be in play. You have to continually reassess the assumptions you’re basing your decisions on and build in some variables.

‘In looking to the past we can possibly make some broad assumptions about the future and try to gauge the world we are going to encounter in the coming decades.

‘The past century has been one of enormous change.

‘We need to go to museums or antique shops to catch a glimpse of the way the world used to operate.

‘While there were advantages in a world that was a little less complex and slower paced, there were also disadvantages. Infant mortality rates were higher. In a world before antibiotics, illnesses claimed many a life far too young. Your great-great grandfather died in his 30s from an infected tooth. The opportunity to travel abroad — unless it was to fight a war or represent your country for sport — was not an option for the vast majority. Communication was via telegram or letter.

‘Life was simple but also more insulated.

‘The priest, bank manager, headmaster and police sergeant were all respected pillars of the community. Beyond reproach.

‘These days priests and headmasters are tainted by child sex scandals. The bank manager is nothing more than a salesman and the police sergeant could be on the take. How the mighty have fallen — fairly or unfairly — in the eyes of today’s society.

‘We have come a long way (for better or worse) in so many ways.

‘We earn more. We also consume more — goods, services and calories. We are better educated. We are living longer. We are more heavily regulated and governed. We are less independent — we rely far too much on government and its agencies for “solutions”. We are more indebted — home loans, student loans, consumer credit, lines of credit, credit cards. We are in the midst of one of the great periods of transformation in history — technology is only just starting to change our lives.

‘In spite of the contrasts between now and then, some things remain constant.

‘We all die. Booms still bust. Fear and Greed will never go out of fashion. Prosperity is achieved by productivity not the printing presses. It is never ‘different this time’. Too much debt always ends in disaster. If it’s too good to be true, it usually is. While the world gets smarter and faster it is still humans — with all their foibles — who make the decisions. Society and our economy are the sum total of those decisions — good and bad.

‘Millions of collective decisions have created the three big trends that I see influencing our future:

  • Health revolution — living longer, plan for a working life well beyond today’s accepted retirement age. Expect higher taxes to be paid to finance age pensions and care.
  • Technological revolution — automation and robotics will drive costs lower and unemployment higher.
  • Financial revolution — after the next credit crisis, there will be a spurning of debt in favour of savings.

‘Understanding the interaction of these three powerful trends on society in general — and we as individuals — will be important in our endeavour to successful navigate our way through the challenging and exciting years that lie ahead.

‘Love Dad’