The Wall Street Journal (WSJ) published a special issue on July 8 commemorating the 130th anniversary of the first edition, July 8, 1889. In my estimation, the WSJ, along with The New York Times and The Economist are the three absolute best publications. Read them.
A lot has changed since 1889, including the price of The Wall Street Journal (see chart), up 1% a year after adjusting for inflation. The special issue pulls together snippets of the most memorable articles of the last 130 years. The German invasion of France in World War I (1914) is there, as is the Japanese attack on Hawaii (1941), the breakup of Standard Oil (1911) and AT&T (1983), and cultural events such as the British invasion (1964) and the oil gas lines of 1973. And, of course, there are articles about the rise of today’s super giants including Microsoft (1987), Amazon (1996) and the first Apple cellphone (2007) which, amazingly is only just over ten years old.
On the investment front there is the roller coaster stock crash of October 1987, the birth of the credit card (1959) and ATMs (1972), and the fragile financial shape of Social Security, which was commented on as far back as 1975.
Three important articles for individual investors also caught my eye. First, saving for retirement was as important then as it is now. In 1995 the Journal wrote that Baby Boomers had saved little and many would run into trouble in retirement. The same story is being written today about Millennials and Gen Z. Traditional pensions have gone away and saving for retirement is very much Job One.
A second article reminds us that “history may not repeat itself but it does rhyme.” Nearly three decades ago Japan was the economic juggernaut, the “Sputnik of the 1990s.” Nothing was going to stop them economically just as nothing was going to stop the Russian space prowess of the 1960s. Well things didn’t pan out exactly as feared. Today the worry is China. Its economic might is real but remember one’s worst fears and greatest hopes generally don’t come about. Keep historical perspective.
A final article is from 1972. The Dow finally broke through 1,000 on November 15. Today the Dow is near an all-time high of over 27,000. If you do the math this works out to a 7.2% average annual increase. When you add in an annual dividend of between 21/2 % and 4%, you come up with a total rate of return of 10% or more. An impressive result amidst all the conflict and confusing events.
Fifty years from now what will the Special Issue of the WSJ look like? Obviously I have no idea. But we can assume there will continue to be plenty of scary stories, wars will be fought, new products will emerge, old (and new) companies will fail and yes, there will be market crashes. But the U.S. economy has always had an incredible talent for self-renewal and without being too cocky or overconfident, I think this strength will continue.
The investment takeaway from the 130th Special Issue is don’t be the investor in the drawing above. Buy good companies at attractive prices and then, and this is the hard part, hold them through thick and thin. Get rich slowly.