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7am Saturday

February 1, 2020

Good morning readers!

I hope you had a healthy week. The market took a hit this week as investors reacted to the spread of the coronavirus:

U.S. Stock Market Trading for the Past Week

The S&P 500 and Dow Jones Industrial Average both declined enough to erase all of the gains we had in 2020. The coronavirus has now infected about 10,000 people worldwide. The fear is that the virus will continue to spread to an extent that it significantly impacts global economic growth. Currenty, the virus is expected to shave about 0.4% off of Q1 U.S. economic growth as tourists from China plunge and exports to the nation slow.

January was the worst month in the market since last August:

Now that the coronavirus has been declared a public health emergency by the World Health Organization (WHO) I thought it’d be a good time to step back from this latest epidemic and look at the bigger picture in this week’s email. I’m not discounting the fact that there have been more than 200 lives lost from this crisis, but I do want to point you to the longer term trends and progress we are seeing in the world.

Evidence That The World is Better Than You Think

Matt Ridley, author of The Rational Optimist, recently published a “must read” article in The SpectatorWe’ve just had the best decade in human history. Seriously.

Key points:

  • “We are living through the greatest improvement in human living standards in history.”
  • “Extreme poverty has fallen below 10 percent of the world’s population for the first time. It was 60 percent when I was born.” (Matt Ridley was born in 1958.)
  • “Global inequality has been plunging as Africa and Asia experience faster economic growth than Europe and North America”
  • “child mortality has fallen to record low levels”
  • “famine virtually went extinct”
  • “malaria, polio and heart disease are all in decline”

People are also consuming less “stuff” than in the past. It may seem counter-intuitive, but consider this:

“If this doesn’t seem to make sense, then think about your own home. Cell phones have the computing power of room-sized computers of the 1970s. I use mine instead of a camera, radio, torch, compass, map, calendar, watch, CD player, newspaper and pack of cards. LED light bulbs consume about a quarter as much electricity as incandescent bulbs for the same light. Modern buildings generally contain less steel and more of it is recycled. Offices are not yet paperless, but they use much less paper.”

“Technology has put us on a path to a cleaner, greener planet.”

The conclusion (emphasis mine):

“As we enter the third decade of this century, I’ll make a prediction: by the end of it, we will see less povertyless child mortalityless land devoted to agriculture in the world. There will be more tigers, whales, forests and nature reserves. Britons will be richer, and each of us will use fewer resources. The global political future may be uncertain, but the environmental and technological trends are pretty clear — and pointing in the right direction.”

…If That’s Not Enough To Convince You…

Read This by Nicholas Kristof at The New York Times: This Has Been The Best Year Ever

“let’s interrupt our gloom for a nanosecond to note what historians may eventually see as the most important trend in the world in the early 21st century: our progress toward elimination of hideous diseases, illiteracy and the most extreme poverty.”

My Favorite Finds This Week

Tuning Out the Noise (DFA Funds)– Every investor should take 2 minutes and 13 seconds to watch this powerful video from DFA (a mutual fund company). It does a fatastic job of showing you how a financial advisor can help you make smart decisions with your investments.

After tough ejection, Shaun Wade impact could extend beyond Ohio State (Letterman Row) – Are there any other college football fans that think the targeting rule needs some change?

+ Peter Diamandis realeased a new book, The Future is Faster Thank You Think: How Converging Technologies Are Transforming Business, Industries, and Our Lives. In it he lays out how the world will change in response to the next 10 years of rapid technological disruption.

The book is a great follow up to his last book published in 2012 titled, Abundance: The Future is Better Than You Think.

Last Saturday I wrote about how Tech is leading the way in this bull market. A “tsunami of technology” (as Brian Wesbury calls it) has been driving economic profits, increased productivity, and economic growth. If you want to understand what is happening in the world and how the future will change as a result of the exponential growth in technology, then read Peter’s books. He is on top of all you need to know.

+ Podcast Recommendation – Another way to get some insight into Peter’s research and thinking is his podcast, Exponential Wisdom. I learn something every episode.

That’s it for this week. I know there are several companies working on drug treatments and vaccines for the coronavirus. I’m confident that there are better days ahead. Let’s hope for a breakthrough soon!

Have a great weekend,


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