There are thousands of intelligent, articulate, and well-meaning citizens of this world. Many are tremendously convincing, too.
These people have a unique ability to sculpt a vision of the future so compelling that it seems impossible not to come true. Their argument is so credible that thousands – if not millions – of people become their disciples, hanging on to their every word.
Many of these soothsayers will also prove to be totally wrong.
In the 1970s and early 1980s, there was a prominent and controversial biologist by the name of Dr. Paul Ehrlich. He taught students at Stanford University and was famous for his lectures and predictions, particularly about world population. By 1980, Johnny Carson, the popular late-night talk-show host, had invited Dr. Ehrlich onto his show at least 25 times.
Dr. Ehrlich was convinced our world was headed for disaster. The problem? Too many people.
This world, he argued, is unable to sustain large numbers of humans. And by the 1970s, he instructed, we were already well past the point of no return.
Dr. Ehrlich even wrote a book about his concerns, called “The Population Bomb,” which was published in 1968.
There were a little more than four billion people walking the Earth in 1980 when Dr. Ehrlich claimed overpopulation was an imminent problem. There are about eight billion people today.
In the U.S. alone, there were about 220 million people when he issued his dire warning to Carson on The Tonight Show. Today, there are 330 million.
Clearly, Dr. Ehrlich’s prediction did not age well with time.
What did he miss?
He missed the fact that humans are creative. He missed that humans are innovative. And he missed that necessity is the mother of all innovation.
Our fellow world citizens created groundbreaking agricultural techniques that could feed more people using less land and fewer people. We moved more people out of poverty than any other time in history. We did more with less and advanced a world that is hospitable to millions more people.
Dr. Ehrlich’s concerns were fair – quality of life, proper nutrition, and commodity availability. He liked to say, “Let’s take care of [the current population] first” before increasing the population. But he was dead wrong about one big thing.
“There’s a finite pie,” Dr. Ehrlich preached. “The more mice you have nibbling at it, the smaller every mouse’s share.”
Thanks to human ingenuity, the pie is not finite.
There are direct correlations to Dr. Ehrlich and the stock market.
First, there will always be “seers,” people who pretend to know the future. They talk a good game, back up their predictions with data, and knit a compelling narrative. Most, like Dr. Ehrlich, will be wrong. We shouldn’t listen to them.
Second, we will continue to innovate. We will become more productive, using less and making more.
Third, our economy and markets are not finite. There is, and will be, room for growth and advancement beyond our wildest imaginations.
Those three factors should continue to increase the value of businesses across the world, which will boost the wealth of the people who own those businesses.
For these reasons, you would be crazy not to be a long-term investor in publicly traded companies, particularly in the United States.
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