120 years ago Edward Bellamy wrote a novel about a socialist utopia. In the ’30s, John Dewey listed it as the most influential novel of the previous 50 years. While his book seems to predict innovations like debit cards and radio stations, the bulk of his text compares his utopia to what came before.
Looking Backward is the title of his work, and today many people make their financial plans with their gaze fixed firmly on the rear-view mirror. When times are good, they see nothing but prosperity ahead. When times get tough, they can only envision a stormy future.
But the past isn’t always prologue: the current market turmoil has created many of the conditions necessary for recovery. Oil prices are dramatically lower. The dollar has stopped its slide. The government’s intervention has restored activity in the interbank market.
As a prediction of the future, Bellamy’s novel was spectacularly wrong. But as a description of how people behave today, he’s right on the money.
Douglas R. Tengdin, CFA
Chief Investment Officer
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