The Greatest Generation

by Paul Sutherland

Posted June 9, 2010

Current Observations

June Edition

The Greatest Generation

by Paul Sutherland

Annuities - Pros and Cons

by Alice McDermott

PDF Version

While attending a seminar, the leader (who was also the former lead brand manager for L'Oréal), in his thick, rich French accent, told me, "Paul, marketing is all emotion. All you need to do is create emotion – nothing more." He explained that to really get excited about a product, people need to have an emotional relationship with that product. He went on discuss the importance of integrity, ethics, virtue and honesty in marketing, which were values he held dear but felt the "marketers of the world" had mostly abandoned. His point was that to get any attention in our "sound byte" world of talk radio, tweets and headline news, we'd need to get an emotional response.

Patrick, my two-year-old, shrieks so loudly when he wants my or my wife's attention that we sometimes keep our windows closed. He indeed triggers an emotional response just as readily as today's writers, idea evangelists and marketers desire to get our attention, grab headlines and sell people on their ideas. For Patrick, however, it's gummy bears or playing basketball with his 15-year-old brother, Keeston, even though it's bedtime. What's interesting about the emotional "fear-greed" paradigm that we have been seeing so much of lately is that we are all still raw from the crisis of a few years ago and still see little in the way of "fixes" from our leaders. In times of crises, many governments seem to default to taking a shortsighted, myopic, easy path and "just say yes" to things like bailouts, dishonesty, and self-dealing by firms and individuals, and enact irresponsible policies that are just as unhelpful in the long term as saying yes to gummies or basketball. Any parent, adult or common sense-infused sibling knows that to say "yes" to Patrick's rants is a short-term gain that sets us up for extreme long-term pain. Because Patrick is my third child, I have the sensibility to let him shriek till dawn rather than give in to his demands. Governments, too, should have the sensibility to impose more austere measures regardless of the populist shrieking.

Feeding our fear at this moment in time are the now well-documented, sound byte-grabbing "three Gs": 1) Gulf (oil spill), 2) Greece (Euro breaking down) and 3) Goldman (ethics and excess). Each of these is a real threat, and politicians and the press have an unrelenting desire to feed our emotions with fear, greed and lust-caused actions. So again people are selling, but really there is no sell without a buy. When someone sells a German bond, Swiss holding company, Hong Kong conglomerate, Spanish utility or French energy company, they're likely saying, "I like a U.S. money market instrument better." But on the other side of the transaction, another investor is buying the security and taking advantage of the emotional behavior of the seller. The question, however, in any buy, sell or hold decision is, "What was the logical thought map of the decision?" Was it logical in the long term or just a quick emotional response to the market's and media's shrieks? The world's government experts, our representatives, heads of state and their advisers seem to have forgotten to think long term with their decisions and are responding to the shrieks of their constituents. Years ago a mentor told me, "Paul, before you can teach well, you need to be a good parent, husband and businessperson. Once you have mastered those skills, then you can teach." Our representatives need to learn a thing or two. Fortunately, history tells us that while many mistakes are likely to be made, the entrepreneurial spirit of capitalism will prevail, and we will muddle through and fix our problems.

The Greatest Generation

My wife, Amy, and I had the privilege of hearing Tom Brokaw, author of The Greatest Generation, speak and field questions a few weeks ago when he came to Traverse City. His thoughtful answers were inspiring and filled me with a hope that only rational analysis could bring. When asked about today's political, economic and polarized world, he smiled and chatted about Watergate, the Kennedy assassinations, Oswald, Martin Luther King, Agnew, Vietnam and the economic mess that we pulled out of in the '80s. Also with a smile and a wise demeanor that only someone who had "been there – done that" could have, he talked about what he called "the greatest generation"– those who survived the Great Depression only to find themselves in two major wars, a Holocaust and the devastation of most of the world (except the U.S.). He did not want to trivialize today's problems, but when he compared them to the world's scenario during the '60s and '70s, we had to feel like our current situation was not something unmanageable. Things are not as bad as they seem in the political arena … just like in the investment arena. As part of our disciplined approach to looking at companies, I often use SWOT (strengths, weaknesses, opportunities and threats) analysis – the same method I used when working toward my MBA. I got to thinking about the world's economy, and as the SWOT illustration (right) highlights, we have reason to be either optimistic or negative – it's our choice.

Lunch in the USA

I had lunch today with a Zambian born immigrant, and we chatted about Africa, where 30,000 of its citizens die of starvation and preventable deaths every day. He is hopeful about Africa's fixes, but sad that corruption, "live only for today" mentality, aid that causes dependence and its fear-based system seem to bog down any progress. Throughout U.S. history, we have had men and women rise from obscurity to be leaders at times when they were needed most. When I think of how lucky we are, and how events from 234-plus years ago shaped our nation, I can see only reason to be optimistic. This young Zambian's father worked in the copper belt and spent his meager mineworker's income to educate his children. That was his only priority. That was his only goal. I'm becoming more and more optimistic that Africa will figure it out, too. When we look at Singapore, China, Brazil and scores of other countries and the progress they've made, it is so easy to be rationally optimistic. When the likes of George Washington, Mahatma Gandhi and Nelson Mandela appear when their citizens need them most, it is easy to be optimistic. The Fourth of July is just around the corner, and I am so proud that I was born in the U.S. I am most proud of the fact not that we have fought and won wars and overcome the Great Depression, but that we have fought against complacency, negative attitudes, laziness, despair and had little tolerance for mediocrity throughout our history. We Americans have "good bones" and a great legacy. In a few years we will look back on the three Gs as an interesting footnote in history. Life goes on, and I am optimistic, because when I perform a SWOT analysis on the U.S. I see the opportunities and strengths boxes filled to the brim and the threats and weaknesses boxes chock full of opportunities to fix.