In early October, MarsJewett was delighted to welcome so many clients and friends to our Client Appreciation Event. Historically, the firm has facilitated such events to express gratitude and provide an entertaining experience for clients. Past events have been held in theaters and museums, but the pandemic deferred such gatherings for the past thirty months. It was wonderful to greet so many of you – over 200 people were in attendance – for this years’ luncheon in the ballroom of The Golf Club at Newcastle.
Offering hot-off-the-press viewpoints on the economy and future, our speaker was Mark Zinder, who was well-liked from a similar MarsJewett gathering seven years ago. We gave him a hearty and humorous introduction, with the repeated refrain, “My name is Mark Zinder. I am an economist, historian, and futurist.” This humorous point is not lost on anyone who was present. Early in Mark’s career, he worked with Frank Abagnale, the famed con-artist whose story was depicted in the movie Catch Me if You Can. Mark wrote the forward for The Greatest Hoax on Earth: Catching Truth, While We Can, contending that Mr. Abagnale sold the world an entirely fabricated life story. Mark’s resume is no forgery. He was the National Spokesman for Sir. John Templeton, and has worked with some of the top minds in finance.
Mark is engaging from the stage. He shared just-in-time insights about our world and economy, woven with humor and captivating stories. Echoing often shared sentiment, Mark quoted Yogi Berra who said, “It’s tough to make predictions, especially about the future.” From there, the crowd was guided through poignant moments from the last seventy years – like the 1957 prediction of a driverless car where riders played dominoes while scurrying down open freeways. Yet in the 1970s, Ford Pintos erupted in fireballs. And quoting Henry Ford in 1913, he said “If I had asked my customers what they wanted from Ford Motor Company, they would have said a faster horse.” Thankfully, the automobile has made progress despite humanity’s inclination to focus on the present.
Folly in Forecasting
Poking fun at society’s desire for predictions, Zinder demonstrated that data can be manipulated to construe almost anything. The first six months of 1970 were like this year, with stocks tanking 24.7%. Then the market rebounded completely by year’s end. Should we expect the same in 2022? Countering our desire for predictions, Zinder humorously showed that the consumption of cheese has a 95.6% correlation with the number of people who die by entanglement in bedsheets. Who knew??
Correlation of Cheese Consumption and Bedsheet Entanglement Deaths
Insights on Inflation
Making sense of today’s economy, Zinder contended that inflation will decline sharply soon. Channeling his inner historian, he talked about how coins were minted smaller and smaller, and why tuning forks gauged if coins were a forgery or “rang true” – originating our modern-day expression. He spoke about Zimbabwe’s runaway inflation and that citizens literally flushed Zim dollars down public toilets! But for inflation in the U.S., he provided hope. Mark showed that year-over-year, oil, gold, copper, lumber, and regional rents are cheaper. He showed that the prices of some grocery staples and travel, like airfare and hotel stays, are declining month-over-month. The Consumer Price Index (CPI) compares year-to-date prices. Depicted in the chart below, when January thru June 2022 numbers are compared to new lower readings in the months ahead, the CPI will drop precipitously. It is true that, year-over-year, inflation is up 8.3%, but Zinder asserts that inflation numbers will decline sharply in 2023 when the former CPI data rolls off the chart.
Consumer Price Index: August 2021 to August 2022 Month-Over-Month
Is It Different This Time?
Mark Zinder – economist, historian, and futurist – culminated his presentation by poignantly asking, “Is it different this time?” One of Zinder’s earlier examples came back to mind. He told the story of legendary nineteenth century financier, Baron Rothschild. Panic selling besieged the British stock markets prior to the Battle of Waterloo in June of 1815. Fear turned to folly. Everyone was selling. Then, as Napolean lay defeated, Rothschild became one of the most successful investors of all time. He is credited with saying, “The time to buy is when there is blood in the streets.” As investors and sojourners in life, the lesson rings true for us, too. There is folly in forecasting. We cannot predict stock market movement. Humanity experiences many slowdowns and disruptions. And then we move ahead. Henry Ford’s future was not satisfied with a faster horse. Instead, he relied upon unfettered innovation to invoke new development, growth, and hope for a better tomorrow. Mark Zinder’s reminds us that, despite present challenges, we are uniquely equipped to reimagine new pathways for progress.
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