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GP4Dec: Optimism Unbounded
Inspite of the Present Difficulties. A few
years back a chap at Oxford spent a decade putting together a global
collection of art prints he called “The Hope and Optimism Portfolio.”
Surely its values have held up much better than the hope and prayer tech
stocks of the 1990s. It’s named after a work by one of his Namibian
countrymen, John Muafangejo (see
www.btinternet.com/~hopeandoptimism/muafangejo.htm). The full name
is “Hope and Optimism Inspite of the Present difficulties.” If you can
exude optimism in the face of Africa’s AIDS epidemic, overwhelming hunger,
and insistent poverty, then you possess the stuff of heroism. The
spirit unbent.
Three Quarters Full. The ultimate contrarian is
the optimist (not the pessimist) who just doesn't know how to fall down. In
some instances, rose-colored glasses are used to put a bloom on events. A
coterie of economists even now are telling us how good things are, no matter
our pain. Until this year, they could not quite admit the economy had hit a
speed bump. This year they are sort of saying we had a recession maybe but
that whatever it was is over.
None has been as relentlessly upbeat as James F. Smith at the University of
North Carolina's business school, who cannot understand why the media has so
ignored all the good news he trumpets about our 2002 economy. He is living
proof that economics is not entirely a dismal science, and his cup is always
3/4 full. Yet he does remind us that there always niches that merit
investment even if many industries have fallen off a cliff. Not a bad
thought during this period of disinvestment. Smith will appear on the Global
Province soon.
Scotty. A new book is out about James
Reston, who was for decades the powerful New York Times columnist and
Washington bureau chief and confidant of presidents, senators, and a host of
world leaders. The book is
Scotty: James B. Reston and the Rise and Fall of American Journalism.
It was during his tenure that the New York Times counted politically,
and it's never been as important since. He was civil, a middle-of-the-roader,
discreet enough to realize he did not have to tell all. For this he is
somewhat disparaged now. Throughout he was an optimist about the American
society in which he lived. Clearly no newsperson has come along who enjoys
the same power and influence. One of the uses of affirmation and optimism,
forgotten by the distrustful, catty scribblers of the present day, is that
it lets you sway history as well as report on it. Too clever, acerbic
journalists only strut at the margins of life well away from the playing
field.
Greater China. Business Week (December 9, 2002) has a lengthy
article on Greater China that dwells on the growing economic integration of
the People's Republic, Hong Kong, and Taiwan. It reminds us of what an
economic colossus China has become and is becoming. What's implied but
unsaid here is what sets China apart from the United States and Europe. In
the face of all their very considerable problems (bankrupt banks, horribly
run State-Owned-Enterprises, rural poverty, a growing AIDs crisis, a high
suicide rate), the Chinese have hope and optimism, something currently
absent in the West. Business travelers who step off the Dragon Air plane in
Beijing or Shanghai sense the go-ahead spirit of the country. Optimism keeps
Greater China moving forward, and it is the only major mega-growth economy
in the world
Sine Qua Non. Jack Stahl, once of Coca Cola, now heads run-down
Revlon, drained of energy by Ron Pearlman and stooped over by debt. Once the
country's leading cosmetics company, it is now is a very weak number 3.
Stahl is bringing it back through marketing, which means brand investment,
not cost cutting. At the heart of his relentless attention to every
marketing detail is the belief that there are enough customers out there who
want what he's got if he can rebuild the company's relationship with them.
Already he has picked up a little market share by spending enough bucks to
give the company a future. Without such belief and investment, soon enough
there is nothing.
Likewise, Bill McLaughlin came into cash-dry Select Comfort Corporation and
rebuilt its marketing by adopting a Sleep Number Index as its key selling
tool to reach a much broader audience for its mattresses. Tumultuous changes
in our markets call on all of us to reinvent the way we go to market. Sales
are well up in 2002. As Stahl, he invested in marketing even in roiled
markets. Aggressive marketing, when the cash is low and the economy is
slogging, is optimism in action. Lesser men would dress their companies up
for sale and give up the ghost. We will discuss Select Comfort on the Global
Province in December.
Churchill Got It Right. He said, "The optimist sees opportunity in
every danger; the pessimist sees danger in every opportunity." We're at that
time when it's easy to be blinded by danger. Those too put off by danger are
simply suffering further losses. It is this risk-averse tendency that
economist William Baumol has warned us about (see Big Ideas #122 on the
Global Province).
Best of the Week. Last week we had Bay scallops for lunch, just taken
from Nantucket waters the night before. Wonderful kinfolks had sent them our
way. They are better than the scallops found in the marketplace by at least
a factor of 5. Nothing like fresh Bay scallops, cooked for no more than a
minute in a cast iron pan, to bring a smile to our faces and optimism to our
hearts. Similarly we believe our economy will be cured by good, new products
and optimistic spirits. We may even have more scallops tonight.
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