Life's stories offer priceless investment advice

By DAVID MOON, Moon Capital Management, LLC
April 19, 2009

A friend of mine, George, is an active 92-year-old gentleman who tends to his garden each day, drives himself all around east Tennessee and exercises an attention to detail that any accountant would envy.

George’s parents landed on Ellis Island five years before he was born. He was 13-years-old when the U.S. stock market crashed in 1929. He graduated from high school during the Great Depression.

I sat down with him recently and asked about those years. I also invited some young people from my office to sit in on this impromptu, first-person history lecture.

People often tend to remember things larger and more difficult than they actually were. How else could so many people have walked five miles uphill both to and from school each day as a kid?

But listening to George, it still seemed obvious that the totality of the personal suffering during the 1930s was significantly greater than today.

George described a childhood that meets any modern definition of deep poverty. Although they ate meat only once or twice a week, he said there were people worse off than his family. He didn’t realize they were poor until he was well into his 20s.

He talked about new government programs introduced during the period. I was anxious to know if he credited World War II or those public works projects for pulling the U.S. out of the Depression.

He didn’t take the bait, instead suggesting that the U.S. eventually overcame its excesses and just grew itself back into prosperity.

George talked about Roosevelt’s banking holiday - four days in 1933 when the new president ordered all U.S. banks to close while Congress rushed to enact emergency banking legislation.

I’ve always thought “holiday” was a strange term to describe this.

We talked about the Works Progress Administration, an agency created to manage a series of projects aimed at putting unemployed people to work. These included building much of the infrastructure in the Great Smoky Mountains National Park.

He never discussed Wall Street bailouts or government handouts to corporations. Probably the closest comparison to General Motors and Chrysler from today was the 1930s farming industry– an industry then dominated by individuals, not corporations.

Interestingly, George’s dad did nothing to help his own son get work, instead forcing him to build his own network and relationships. After school, George’s first job was that of a courier. He received the job offer from a fellow who shared his ethnic ancestry – but not his last name.

By every definition, today George is a rich man. The lessons of his father obviously paid dividends.

Most of the economic observations and commentary we read today is influenced by the core beliefs of the economist preparing the report.

When you sit down with a non-economist who shares his life’s stories with you, the opposite is true. His personal biases are the result of decades of observations, including his economic experiences.

Here’s some priceless investment advice: call the oldest person you know and take them to lunch this week.

David Moon is president of Moon Capital Management, a Knoxville-based investment management firm. This article originally appeared in the News Sentinel (Knoxville, TN).

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