The Rational Investor #050: What Time Is It?!
Happy Saturday to you,
Welcome to the 50th edition of The Rational Investor Newsletter.
Two quick notes before I get to this week’s quote: 1st, this is the final Rational Investor Newsletter for 2024 (I’m taking next week totally off.) And 2nd, if you are a Financial Advisor, there will be a big announcement early in 2025 that you’ll want to stay tuned for… :)
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This week’s quote comes from the book How We Got To Now by Steven Johnson. It very well may be my favorite book from 2024, and I cannot recommend it highly enough. It’s fascinating.
While I’m obviously a big advocate for studying the investing greats, one piece of investing success that is so commonly overlooked is the importance of optimism about the future.
And I’ve found the best way to build optimism for the future is to study the progress of the past. Not necessarily the achievements themselves, but the process of progress itself. Once you come to understand how all the various advancements of the past were a result of an incredible combination of ideas, advancements, and discoveries across various fields—that, over time, are combined further to create entirely new advancements (this is a self-perpetuating cycle)—you realize that more progress isn’t just likely, but inevitable.
And thus, optimism should be our default viewpoint.
Without further ado, here we go…
Here’s Steven Johnson on “What Time Is It?”:
“When your phone tries to figure out its location, it pulls down at least three of these time stamps from satellites, each reporting a slightly different time thanks to the duration it takes the signal to travel from satellite to the GPS receiver in your hand. A satellite reporting a later time is closer than one reporting an earlier time. Since the satellites have perfectly predictable locations, the phone can calculate its exact position by triangulating among the three different time stamps. Like the naval navigators of the eighteenth century, GPS determines your location by comparing clocks.
This is in fact one of the recurring stories of the history of the clock: each new advance in timekeeping enables a corresponding advance in our mastery of geography-from ships, to railroads, to air traffic, to GPS. It's an idea that Einstein would have appreciated: measuring time turns out to be key to measuring space.
The next time you glance down at your phone to check what time it is or where you are, the way you might have glanced at a watch or a map just two decades ago, think about the immense, layered network of human ingenuity that has been put in place to make that gesture possible.
Embedded in your ability to tell the time is the understanding of how electrons circulate within cesium atoms; the knowledge of how to send microwave signals from satellites and how to measure the exact speed with which they travel; the ability to position satellites in reliable orbits above the earth, and of course the actual rocket science needed to get them off the ground; the ability to trigger steady vibrations in a block of silicon dioxide-not to mention all the advances in computation and microelectronics and network science necessary to process and represent that information on your phone.
You don't need to know any of these things to tell the time now, but that's the way progress works: the more we build up these vast repositories of scientific and technological understanding, the more we conceal them. Your mind is silently assisted by all that knowledge each time you check your phone to see what time it is, but the knowledge itself is hidden from view. That is a great convenience, of course, but it can obscure just how far we've come since Galileo's altar-lamp daydreams in the Duomo of Pisa.”
It’s almost too easy to gloss over everything noted above because miracles become such commonplace in our world. Any one of those discoveries was momentous in and of itself, but we pay them no mind as we’re completely ignorant to what is required to provide the time on our phones (each of which holds more computing power than existed on the Earth ~50 years ago).
More miracles will occur in the decades ahead that will go entirely unnoticed, which will spur even more miracles that will, again, go equally unnoticed. But that’s the nature of progress.
The data is indisputable that we are wealthier, safer, and living longer than ever before (despite our best efforts to be unhealthy). And yet, thanks to the media, people are convinced that we’re poorer and more at risk than ever before, so they deny the possibility that more progress will continue because they deny the progress we’ve experienced to this point.
These manufactured rumors and beliefs perpetuate themselves to the point that they are viewed as truth when they are, in fact, quite the opposite of truth.
Because the truth is that miracles abound, my friends, and I believe the decades ahead will be collectively brighter than the ones that lie behind us—not because our heads are buried in the sand, but because we are the few who are actually looking up to see what is happening, as opposed to being “told” what is happening.
Keep the faith. Enjoy the holidays!
That’s all for this week. Thanks for reading. I’ll be back next week with more timeless wisdom from great investors.
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