June 24th 2005

From time to time I sit back and look at where we have been and how I see it relating to where we are. Although not a complete match, I see us now in a period of time like 1974, 1984 and 1994. In 1974 the oil problems were hitting their second crisis period in 3 years and the markets looked bleak. In 1984 we were in the middle of the S&L crisis, high interest rates and the markets looked bleak. In 1994 we had just had a war in the Middle East , oil prices were up, interest rates were being raised and the markets looked bleak. Today, we have a war in the Middle East , oil prices are hitting their second crisis period in 3 years and the markets look bleak.

During each period you heard people say, “In the future the stock markets will not be able to give us the returns we had in the past.” In the 1970s oil drove the stock markets up during the last half of the decade. In the 1980s computers and lower interest rates drove the stock markets up during the last half of the decade. In the 1990s the internet and lower interest rates drove the stock markets up during the last half of the decade. All of these decades started the boom in the latter half of the decade. They were driven by things we did not even know existed before the decade began.

Well, guess where we are today. I see the markets ready for another new driver that many people do not see coming. Do you see what it is?