“There are new gods growing in America, clinging to growing knots of belief: gods of credit card and freeway, of Internet and telephone, of radio and hospital and television, gods of plastic and of beeper and of neon. Proud gods, fat and foolish creatures, puffed up with their own newness and importance. They are aware of us, they fear us, and they hate us," said Odin. "You are fooling yourselves if you believe otherwise.” - Neil Gaiman, American Gods
Earlier this week, I finished an amazing audiobook that captured my imagination: American Gods: The Tenth Anniversary Edition (A Full Cast Production)*. The story takes place in modern America and features gods, both old and new, living among us mere mortals. The Old Gods, including Odin, Loki, and Easter, were brought to America centuries ago and are now weak, scraping by on the fringes of society. Their power and influence have faded because they have been forgotten - but that doesn't mean they are completely powerless. On the other side, the New Gods, such as Media, the Internet, and Television, have grown powerful as humanity places its faith in a new order. There's quite a bit more to the story, but I won't ruin it for anyone who decides to read it. And you really should.
*If you decide to listen to the audiobook I highly recommend this version because the cast does an excellent job bringing the story to life.
After finishing the audiobook I couldn't stop thinking about some of the ideas I had heard, especially the idea of the old, forgotten gods and the young, new gods.
As I was reading the Wall Street Journal, I took note of the companies making headlines: Amazon, Apple, Facebook, Netflix, Tesla, and Twitter, among others. What do these companies have in common? All were founded less than 45 years ago. Fun Facts: Founded in 1976, Apple is the oldest of the bunch, which makes it 41 years old - the same age as me.
My point is that these are relatively new companies and they garner quite a bit of attention from their customers/users, the media, and investors. I started to think of these companies as the New Gods.
If the companies listed above are the New Gods, which companies are the Old Gods? I tried to come up with a list of companies that had been replaced or forgotten:
- Amazon is where we buy books and pretty much everything else these days, so Barnes & Noble and Sears seemed like good choices.
- Apple makes more than just computers now, but IBM seems like a good fit.
- Despite its production problems, Tesla continues to be the carmaker everyone talks about. I think Ford and GM are the obvious choices.
- Facebook and Twitter are social networking platforms as well as sources of news, both real and fake. All of the old media companies fit into this category.
Why bother comparing all of these companies? Because it illustrates how investors behave. Naturally, we want to use, read about, and invest in the latest and greatest things/companies. This means we often forget about the old, yet still powerful, companies, sometimes with dire circumstances. Remember the 2000 - 2002 dot-com bubble? Pets.com, which was considered one of the Next Big Things, didn't survive.
Here's another good example of why it's important to focus less on the New: In 2010 Warren Buffett's Berkshire Hathaway completed the purchase of BNSF Railway, a nearly 160-year-old company. At the time, I remember reporters saying Buffett was crazy for buying a railroad. It's an old industry! How boring! Of course, once Buffett explained why he bought a railroad everyone thought he was a genius.
The Takeaway: Don't chase the latest and greatest things - especially when it comes to investing. Stick with boring, tried and true investments. Better yet, keep it simple and buy a low-cost index fund.
One More Thing
The day after I finished listening to the American Gods audiobook I started writing down ideas that would eventually become this post. As I fleshed out my ideas I turned to that all-knowing deity The Internet for more information. To my surprise, the search revealed a similar piece written by Josh Brown earlier this year. Curses!
Fortunately for me, Brown's piece goes in a different direction than mine. Anyway, please let the record show that:
- I swear I came up the idea for my post before I stumbled across Josh Brown's blog, and
- Brown's post is excellent and you should read it.
Listening / Playing / Reading / Watching
Here's what has my attention right now:
- Leonardo da Vinci by Walter Isaacson. How can anyone pass up a biography of da Vinci??
- Hash Power - A Documentary on Blockchains and Cryptocurrencies by Patrick O'Shaughnessy on his podcast, Invest Like the Best. The Invest Like the Best podcast quickly became one of my favorites after listening to just a couple episodes. The Hash Power series is a good place to start if you want to learn about cryptocurrencies.
- Mindhunter on Netflix. Have you ever wondered how the FBI figured out how to profile and catch serial killers? If so, there might be something wrong with you.
- Wolfenstein 2: The New Colossus. This game provides an alternate version of history, one where Germany won World War II and America is controlled by Nazis. The developer, MachineGames, released this game at a time when America actually has a real Nazi/white supremacist problem. The social commentary in the game is fantastic.