Warren Buffett and optimism for our future

26 February 2011 | 0 Comments

I’ve long been a huge fan of Warren Buffett and Charlie Munger – their words of wisdom often go beyond the narrow confines of ‘value investing’ and into every day life.

Contrary to the tone of what you might read on the front page of newspapers or on CNN.com, Buffett’s latest Berkshire Hathaway annual letter instills a strong dose of optimism, reminiscent of Matthew Ridley’s Rational Optimist .

No matter how serene today may be, tomorrow is always uncertain.

Don’t let that reality spook you. Throughout my lifetime, politicians and pundits have constantly moaned about terrifying problems facing America. Yet our citizens now live an astonishing six times better than when I was born. The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential – a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War – remains alive and effective.

We are not natively smarter than we were when our country was founded nor do we work harder. But look around you and see a world beyond the dreams of any colonial citizen. Now, as in 1776, 1861, 1932 and 1941, America’s best days lie ahead.

It is easy to point out the faults with today’s society and apply that to where we appear to be headed. Unrest in the Middle East, rampant commodity inflation, and a government that appears incapable of coming to decisive decisions drive an inherent pessimism that trickles down from the media to saturate the worldview of many US citizens today. However, what many fail to realize is that this has likely always been the case. The degree to which we communicate and interact with media today may be different, but the underlying thoughts were always there.

Alice Shroeder’s of Buffett briefly mentions that he would sit for hours reading old newspapers going back to earlier parts of the 1900′s to get a sense of what the tone, advertising, and stories were like. One often hears that things were always better ‘back in the day’, but not many actually go back to get a feel for the time first-hand. I trust his assessment.

Right now looking at how far we’ve come and the accelerating pace of technological progress, things look pretty damn good.  And they will likely get better.