Thursday, February 15, 2007
Points of Inflection
I've been consistently wrong by overestimating economic downturns in otherwise successful economies. 1990 and 2002 both seemed a lot more serious at the time than in hindsight. It amazed me that 1987 was just a blip in the stock market. The S&L crisis is a forgotten memory. The long term trend in reasonably free markets is up. And the long term trend in places that have been economically screwed up and suddenly fixed is seriously up.
That seemed like a time of great change. Most people thought of computers as giant mainframes guarded in bright rooms while simultaneously a whole unseen wave of people were using small personal computers and word processors. Charlie Chaplin broke the news to the masses. Japanese cars were getting serious and seriously noticed. The US economy finally started getting fixed. The long dead stock market started going up for a change. "High tech" started getting the spotlight. I view that early 1980s period as a point of inflection, a sharp turn. Things are always changing, but it seems like there are points in time when the prevailing view breaks and re-forms to something different as a result of a particularly high gradient between the old and new.
It seems to me like 1995 was also like that. Most of the world had never heard of the Internet and it seemed like a secret world and you were either in it or totally unaware of it. The time of DOOM and the World Wide Web. It was also the time of Yahoo (which would go public a year later) and the dot coms. It was the year that you might suddenly realize, "Hey, the economy isn't all that bad anymore."
Is 2007 another one of those points? I'm increasingly getting the sense that it is.
UPDATE Feb 21, 2007:
This seems like the future of the personal loan industry: www.prosper.com. Real "Army of Davids" type stuff.