The thread is pretty quiet this weekend ... is that because of...

The thread is pretty quiet this weekend ... is that because of Easter or is everybody a little nervous and shell-shocked?

A book I read several years ago 'Common Stocks and Uncommon Profits' [Philip Fisher] sort of set the tone for my interest in the market. I believe, although the book is well and truly outdated it does have something useful to offer as far as attitudes to today's markets are concerned.

Philip Fisher started a stockbroking business right in the middle of the Depression in the US [~1931]... not, you would think, particularly good timing. He went on to become very successful.

His success was due to the fact he recognized society around him was changing in very profound ways. He was in the market and getting to know about all of the new businesses which were only starting out ...in those days the chemical industry, plastics and then a few years later electronics.

I think we are seeing an analogy of the '30s now. Some of the big changes are .... genetics, robotics and AI, commercialization of space, a transition to electricity [away from fossil fuels], peer to peer commerce. Also in the '30s the centre of political power was Europe [the British Empire was then the fading light] and within 10 years the US went from being the 13th largest economy to being the largest [by a big margin]... we are seeing the shift of the centre again.

How Fisher made his money was to seek out the core of the changes and invest his money there. One example is just after the War television was making its appearance in the US ... and everyone wanted one. But ... so many brands.. HMV, Westinghouse, RCA,... which one to invest in? How to pick a winner? Then Fisher discovered that the vacuum tubes for TV were very, very hard to manufacture and that only one company could reliably do it ... [for the life of me I can't now remember which one it was but I think either Pilkington or ICI]... and since every TV manufacturer had to buy from that company that's where he invested. Similarly, when the electronic transistor was just starting to become an essential component he bought into Motorola which was among the first to adopt the technology.

I find it interesting that the Great Depression coincided with such dramatic changes ... and wonder if somehow the two are intimately connected. Personally ... I think we are in a similar time now ....traditional industries and occupations are going the way of the horse and buggy. The sorts of trends identified on the STT thread very likely are a window to the future...