technological progress

Progress Beyond Our Dreams

© Can Stock Photo / smuay

In the spring of 1902, Brooklyn printers by the name of Sackett & Wilhelms had a problem. It is doubtful whether anyone realized the vast ramifications the solution would bring.

When the humidity changed, the printers found that the paper expanded and contracted, causing their four color printing process to come out misaligned. Wasted days, wasted paper–it was a pretty big problem. Fortunately, a young engineer at the Buffalo Forge had an idea.

The engineer drew plans for a device to control the humidity of the print shop, and the crew from Buffalo Forge installed it. It was the first of its kind. By the end of the summer, the device had been a success.

It took four years for someone else to come up with the name “air conditioning.” Systems spread to other commercial enterprises, and eventually to other businesses, homes, and even to automobiles. As we approach the summer months here in the 21st century, it is hard to imagine life without air conditioning!

The engineer, who was just a year out of college when he drew the plans, later founded and ran his own company. You might have heard of Willis Carrier’s air conditioning company.

Every day, somewhere people are working on solutions to problems the cost us money, time, health, or some other resource. Others are working on things that may improve our lives, or entertain us, or provide some other advantage. Our everyday lives contain scores of things that did not even exist twenty or forty years ago.

For most of history, this is not how things worked. Life was nasty, brutish, and short. Generations came and went, but little changed. Then modernity unleashed human creativity and potential like never before.

This may be the key factor behind the seemingly perpetual upward tendency of the equity markets, all the way back to their origins.

We have mentioned this before, but it bears repeating: stock markets are volatile. They go up and down. There are no guarantees. But they may represent a way to invest in human potential. Clients, please call or write if you would like to talk about this.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Investing in the Path of Progress

© Can Stock Photo / irynarasko

The economic history of the past 2,000 years begins with little change for many centuries. Then, in the 17th century, things began to change—a lot.

Energy progressed from waterwheels and windmills to steam engines, electrification, and the fossil fuel economy. Each revolution brought lower prices, wider adoption, and increases in human productivity, incomes and wealth.

Energy powered the factory system, in which standardized parts enabled output to skyrocket compared to the age of one-at-a-time production by artisans making custom articles. One may have romantic notions about the age of the artisan, but far more people could afford shoes when they came out of a factory.

And that was just the beginning of the modern world, with its incredible increase in living standards and lifespans.

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Country by country, the pattern is rising urbanization and the decline of subsistence agriculture as economies modernize. It happened first in Europe and America. China is well along this path. The effect on incomes and economic growth is nothing short of astonishing, as you can see on the chart.

As investors, we see what may be a compelling opportunity from two current trends coming together. The next energy revolution, built on solar technology and battery storage, will enable vast parts of the developing world to modernize more quickly. Just as some places skipped the copper-wire age of telephones and built cell towers, in the years ahead some areas will skip the age of fossil fuels for electricity as solar power gains the economies of scale.

The most populous democracy in the world, India, is at an early stage of the trend to urbanization and modernity. Two thirds of the people live in rural areas; many are still engaged in subsistence farming. With a culture that values literacy and education, India is poised for growth and progress. Some believe that India is where China was twenty or thirty years ago—before decades of rapid economic growth. Add the next energy revolution to the mix, and you can see that exciting times may lie ahead.

The economy of India already includes some global companies, and many more publicly owned companies producing goods for the local market and nearby neighbors. By our standards, it is investable: money can be effectively invested with a reasonable expectation of gains. The India exposures we are putting in place are traded on the New York Stock Exchange, and priced in US dollars.

Of course, the future is uncertain, and there are no guarantees. As with all long-term investments, prices may be volatile. Clients, if you would like to discuss how a small India allocation might affect your portfolio, please call us or send email.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Investing involves risk, including possible loss of principal.