First of Two Sets of Responses to Essay "One for the Textbooks (of the Future)"

RESPONSES TO “ONE FOR THE TEXTBOOKS (OF THE FUTURE)” Thanks to all of you who responded to my essay so quickly and thoughtfully, at times also emotionally. I applaud you for sharing your thoughts with me and the larger group of readers! Before I begin quoting (anonymously) several of the responses, I wanted to refer to an industry newsletter forwarded to me by a friend. In it the author addresses what he considers to be an overvalued stock market. I wanted to share with you the phraseology of his conclusion because I thought it was excellent, not only for his narrower opinion of the future course of stock prices and stock indices, but also for today’s economic and financial prospects more broadly. In brief, he admitted to not knowing how the level of stock prices and indices will finally resolve themselves. However, he was confident it would not end happily. In this “Readers’ Responses” essay I have tried my best to exclude any material I considered political in nature. Part of me believes there are those who see “politics” in leaves falling off trees and other benign activities that are part of everyday life, however. All I ask is for you to please understand, if you find anything you consider “political”, it slipped through my personal political shredder, for which the settings apparently are not set as finely as they are in your shredder. My original essay had listed ten major trends, to which responders added several more: China’s huge military build-up and expansion plans, for example, and Russia’s stance with respect to the Ukraine. Also, Iran’s promise to annihilate Israel, at a time when Iran is getting ever-closer to possessing weapons grade uranium. The subject of inflation came up frequently too, generally as an inevitable result of other trends already covered. In hindsight I should have added an eleventh trend to my original ten, that is, the phenomenon we recognize as Amazon and how it has disrupted (refined? Enhanced? Taken to a new level?) the business of retailing. If we combine China, Russia and Iran into one new trend, that of threats from foreign powers, separate out “inflation” as an independent consideration, and add Amazon as a retailing trend all its own, we are now at a baker’s dozen major trends whose potential impact on our lives and livelihoods is substantial. Personally, I find this situation unsettling and uncomfortable because I cannot sort out so many countervailing forces at one time. Any yet, I’m sure everyone understands these dozen major trends are not part of an academic exercise. Rather, they are real time changes in process none of us can afford to ignore. One thing I’m thinking about is having our adviser liquidate our investments in stocks and any debt over 30 days to maturity, in effect, “sitting out” the next period of time—perhaps six months, for starters. If we make that change, we will forego any opportunity for gains if they occur in order to protect our principal from any losses should interest rates increase and/or stock market values decline. One other alternative is to invest in floating rate assets, whether debt or preferred stock, in order to offset the negative effects of rising interest rates. Let me add, please, that this essay is not to be considered giving financial advice or counsel. That’s for hired professionals to provide for you. Mine are private musings I’ve invited you to listen in upon “over my shoulder” as I too wrestle with them. Responses I categorized as emotional and technological (Bitcoin and other cryptocurrencies) are displayed in this essay. Those related to interest rates, economic activity and philosophy, and inflation will be discussed in a second essay, most likely published later this week. Emotional responses: One person wrote, “It is scary knowing we have never been in this economic situation before…I believe the people in the know have abdicated their brains to the government. How sad.” Echoing the same sentiment, another explained, “I feel helpless, and I have no response. Right now I have only one alternative, and that is to let my savings and investments ride with the flow.” Riedy note—I would encourage readers to believe there always are alternatives. To be frozen by what some call “analysis paralysis” must be an unpleasant feeling, and is not a place one needs to be. The next essay includes a preferred stock strategy outlined by a financially sophisticated friend, which might be appealing to some families during these mightily uncertain times. Technology (Bitcoin, blockchain, cryptocurrencies): “Bitcoin. Another mystery to me. I tried to understand it and tend to feel it is going to crash, making a few insiders extraordinarily wealthy, and most financially scarred. This may be the ‘Big’ thing that will happen.” Riedy note—while this sounds like me, even to me, it is not. I apparently have a techie clone among my readers. Another person, uncommonly bright and analytical by nature, responded with “I avoid crypto and things I can’t value with a present value model.” The two young men who are collaborating on guest essays on technology/Bitcoin/crypto each also responded, independent of one another. The first had a policy concept in his response: “Crypto and the like naturally balance the massive, unhealthy inequality in the economy and are a positive, as long as the U.S. Government finds a way to embrace and harness some of its potential…Ultimately, crypto will lead to the coming global currency, which is scary if you hold the reserve currency.” The second individual had this observation: “Your essay…had me thinking in all directions…I find myself to somehow be both a ‘Bitcoin as a hedge guy’ and concurrently a ‘we now live in a deflationary world’ guy.” Riedy note—this individual and I have a phone conversation scheduled for the coming week, to help me understand his young, technological mind and statements like the one above. From a person of few words I received this statement: “Blockchain is the key game-changing technology of the future.” Riedy note—to me, terms like “blockchain” today are the equivalent of what “calculus” was in grad school. I never understood the concept well enough to use it in a simple declarative sentence. Technology clearly is not an area of expertise for me. In the next essay I will be back in my comfort zone, talking about responses that focused on interest rates, or government spending/fiscal policy, philosophy and public policy, and inflation. END OF ESSAY ................................................................................................................................................ One last point—one friend asked if it would be OK if he forwarded my essay entitled ONE FOR THE TEXTBOOKS (OF THE FUTURE) to several of his friends. “By all means, please do” was my happy response. I would never want anyone to feel as if I had just given them a homework assignment. With that said, however, I would like to invite everyone to forward a copy of the TEXTBOOKS essay to one or two friends, with a cc to me. A goal I have for 2022 is to increase my mailing list from 454 at present to about 1,000 by year-end. Why? It’s probably an ego thing. I enjoy writing and many of you have let me know you enjoy reading my random thoughts, so why not share my work with twice as many next year as I did this year? Mark