The biblical book of Ecclesiastes was written sometime during the period from 450 to 180 BCE. In the writings is a profound observation of history backwards and into the future. A section of chapter one reads “and there is nothing new under the sun. Is there a thing of which it is said, ‘See, this is new’? It has been already, in the ages before us.”
Philosophically we like to think that this describes the continuity of human existence—birth, life, and death for everyone. But it also describes almost everything else.
We think of technology as bringing forth something new but there have been just a few “inventions” that changed the world and were not just improvements. Producing and harnessing electricity was one such event. Another was heavier-than-air manned flight. There are other examples, of course. Yet, the personal computer is really just a super cool and efficient typewriter, abacus and communication device that may have changed the world but was an extension of what came before.
Artwork in Greek and Assyrian culture from 1800 BCE shows horse-drawn carts. The mass produced automobile of the 20th century was nothing more than a change from horse power to engine power.
Elon Musk may someday rocket to Mars but his automobiles are the same as 100 years ago—a box resting on a frame which is secured to two axles and four wheels. And the Ford Model “T” made until 1927 had a feature the Tesla does not offer—a crystal flower vase on the dashboard.
At a recent Investment conference, one hedge fund manager predicted that Bitcoin would go to $700,000 because “It is the first viable candidate to replace gold in the world.” Sorry partner, you’re late to the party. The Chinese “replaced” gold with “paper money” during the Tang Dynasty (618-907) because the warlords were annoyed with their couriers being robbed of physical gold so often.
The expert goes on to say that “it is vastly easier to store and transact with than gold.” That maybe true under normal conditions but one of the reasons gold is still around after a few thousand years was for that exact reason. When the enemy troops came plundering, you could swallow a few nuggets of gold, escape to safety and then let your digestive system do its thing. UBS flash drives do not work well that way.
In spite of all the fantastic investment inventions of the past decades, there is really nothing new under the sun. Raw land has the same opportunities today as before. As long as you can keep the “informal settlers” away, land is a store house of future potential wealth.
A building—condo, house or whatever—comes with good appreciation potential, but has no cash liquidity until you find a single buyer. At least you will always have a roof over your head. Debt—loaning someone money—has always been a popular investment. But an ancient Babylonian tablet reads like a Facebook post. “I loaned Nassir money and he didn’t pay me. Stay away from this crook if you want to get your money back.” Commodities like wood, wheat, and wool are always liquid but require storage and being guarded from theft. But you personally can use those goods if there is no buyer.
Each investment vehicle has its own unique qualities that actually never changes. The only reason to invest in the stock market is instant liquidity at a price. When the stock market is closed, your investment is absolutely worthless. You can’t eat it, wear it, or keep the rain off your head with it. The same is true of flash drive with a thousand Bitcoins in it.
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E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.
