Finding things that seem dumb in hindsight is kids’ play. (Why do you think I ask that my archives extend back only seven days?) Still, it’s fun. Who can fail to smile at stuff like this:
“This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.”
–Western Union internal memo, 1876.
We all have examples. I have a whole file. Here’s one I came across in cleaning out some old stuff and plan to add to my file. It’s what Barton Biggs had to say in the July 19, 1993 issue of Forbes:
“We want to get our clients’ money as far away from Bill and Hillary Clinton as we can. The President is a negative for the U.S. market. I’m embarrassed that I voted for him and contributed money to his campaign.”
Biggs, Morgan Stanley’s chief equity strategist, is a smart and sensible man, as any regular reader of Barron’s or the other magazines that quote him extensively will affirm. Yet in 1993, early into the huge run-up that began with the President’s 1992 election, he recommended that investors hold just 18% of their total assets in U.S. equities. At the time of his quote in Forbes, the Dow was 3500 and change.
His bearishness on the U.S. market was not only because of the Clintons — he felt stocks had gotten ahead of themselves generally — but the Clintons, as you can tell, were a big reason. He didn’t believe the President was serious about cutting the deficit. We would continue to have huge deficits, which would lead to higher interest rates and a sharply lower stock market.
Instead, as recounted in detail in Bob Woodward’s “exposé” The Agenda, the President made the tough choices needed to begin cutting and persuading a Democratic Congress to go along. The projected deficit fell, interest rates fell, the economy grew, profits grew, employment grew, stock prices doubled.