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Dan Nestlerode: Abundance Could Lead to Better Opportunities in Investments

by on March 25, 2012 6:00 AM

In these times of a moribund economy seemingly stimulated by low interest rates promoted by every major central bank in the world, high unemployment, random terrorism and abrasive political discourse, it is easy to forget how the human race became so successful.

The media is filled with conservative and liberal points of view, colorings of the truth, ideological agendas and everything that has recently gone wrong, including the pat down of a 3-year old by the TSA.  I guess terrorists are getting younger every day.

So for a moment, I want to put the media discourse aside and return to the fundamentals of economic success and life extension.

I was thrilled to get 10 copies of Dr. Peter Diamandis’ book, “Abundance: The Future is Better than You Think” after ordering it at the suggestion of Ray Kurzweil, who is an inventor, futurist and author of “The Singularity is Near”.

I am now poring over the book, soaking up the facts and figures of technological and social progress that are ripe to make our collective future much better than the news periodicals seem to forecast.  By “much better,” I mean that we will live longer, be healthier and have more material abundance than those that have gone before us.

Technology is heady stuff that sometimes leads to wonderful investment opportunities.  Just witness the surge in the stock price of Apple (AAPL) in the past 10 years.  There was a time when I was a Microsoft champion, buying and using personal computers made with Intel chips and using Microsoft software.  Now my wife and I have four iPads, a couple iPods and an iPhone.  I even have an Apple router attached to my home cable modem because I grew tired of having to periodically reset my Cisco wireless router.

Please keep in mind that this column is not about recommending any company for investment; it is about the notion of technological advancements.

The past 300-400 years have been ones of great advancement for the human race.  Our life expectancy has expanded from 30 years to nearly 80 years.  We have conquered many of our physical maladies and we are closing in on some nasty diseases that take our loved ones from us too soon.

Penn State noted a few months ago that it had discovered a cure for leukemia in mice (or was it rats?) that is 100 percent effective with no remissions.  Could a cancer cure be in the offing?

Computer stuff gets faster and smaller all the time, charging down the Moore’s Law curve and making devices twice as powerful every 18 months at the same cost.  We are getting close to being able to talk with our computers (Siri, anyone?).

Intuitive Surgical and Mako Surgicals Corp. now produce computer assisted surgical devices that do a better job of surgery than steady-handed surgeons.  We can fix things in the human body sooner and faster than ever before and of course, the aging Baby Boomers are demanding continued progress in healthcare regardless of who will pay for it. Lipitor just went generic, lowering the cost of this effective medicine for those of us with high cholesterol who may carry the risk of future heart attacks or strokes.

All of these developments are coming from people dedicated to figuring out how to make the world a better place for everyone. Yes, those making these breakthroughs often get very wealthy for awhile, but in the long run, their developments benefit people far beyond the short-term wealth that is created.

We in Central Pennsylvania are benefitting from Mitchell Energy’s dogged pursuit of unlocking the methane from tight shale deposits in Texas, and this is leading to a boom in energy development in Pennsylvania and the Dakotas.  I heard today that North Dakota is the fourth-largest producer of oil in the United States.  And, of course, the Marcellus shale is one of the largest shale gas finds on the planet.  Cheaper energy is already lowering heating and electrical costs on the east coast.  Maybe natural gas vehicles will soon be lowering our transportation costs also.

So that’s some of the good news about living in the United States in 2012.

Yes, we have a lot of stuff going on that is divisive and difficult, but we also have a huge number of technological developments that may serve as great investment possibilities but — more importantly — that will propel the march of progress that ultimately allows us all to be smarter, wealthier and healthier in the years ahead.

Dan Nestlerode was previously the Director of Research and Portfolio Management at Nestlerode & Loy Investment Advisors in State College. He retired in 2015 after 50 years in the investment business. A graduate of Penn State University, Nestlerode became an investment advisor in 1965. He can be reached at [email protected]
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