Re: Investing and the future

James Rogers (
Mon, 19 May 1997 17:44:11 -0700

At 10:14 AM 5/19/97 -0700, Max More wrote:
>Do you consider yourself an expert on investing?

I would probably rate myself as "very knowledgeable" if not expert. I've
been investing for many years (stocks mostly) and I have two people in my
immediate family who are heavily licensed securities traders.

>Have you thought about
>which investment strategies might make good sense given the technological
>changes we expect to see over the coming decades? If not yourself, can you
>suggest someone you consider expert on investing from an extropian angle?

What do you mean by "extropian angle"?

Investing is a complex issue and strategies vary widely depending on your
goals. The most common goals are capital growth, tax sheltering, income,
and inflation hedging.

The technological changes have far less impact on the overall economy than
in their own sectors. The sum total of all the "high-tech" and supporting
industries account for 4% of the GNP in the US, and even less in other
countries. Consumer industries have a far greater impact on growth than
technology industries.

The most profound economic impacts are usually caused by demographic
shifts, most of which can be predicted ahead of time with careful study.
The unprecedented 1995-96 American stock market surge was predicted by the
research divisions of several large investment firms a decade or two prior
to its actual occurrence. That surge can attributed almost exclusively to
a large demographic shift. Incidentally, another important demographic
shift is expected to occur ~5 years from now, but with negative impact on
the US market.

Technology stocks ( what I personally specialize in ) are a special case of
investment strategies, since the "normal" rules of industrial age investing
need to be somewhat modified to work properly in the information age. A
lot of people lose money investing in the technology arena because they try
to apply the principles they use on the old school NYSE stocks to the
volatile and uncertain NASDAQ market. It is difficult to make the fabulous
wealth associated with tech stocks unless you are (1) very knowledgeable
about the technologies you are investing in, or (2) very lucky. Since I
don't believe in luck, I always depend on the former. Also, there are
dozens of fad technologies that attract a lot of attention, but are flashes
in the pan and unlikely to generate profits for the investor. In my
experience, most stock analysts have a very difficult time determining the
difference between tech-fad and tech-value. Silicon Valley is littered
with the carcasses of highly-funded, highly-touted companies.

The specifics of a strategy for investing in technology would depend on
your end goals.

-James Rogers