So goes the wise words of King Solomon in the Book of Ecclesiastes of the Old Testament. In fact, that phrase appears 5 times in the Book. But it doesn’t occur near as often as the phrase, “nothing new under the sun.” This phrase is implied or used over a dozen times.

This reminds me of a conversation I had recently with a client. He and I sat across from each other at a local diner and he opined various thoughts of excess greed that has/is pervading the market. He went into how unprecedented it all is, and how he just wasn’t sure if he wanted to give some of these CEO’s his money to invest by owning shares of their stock. (Case in point: Frontline: Breaking the Bank.)

My reply? There’s nothing new under the sun. I believe there are 3 main reasons why this person was overly-anxious about the present problems.

  1. Media – Today, we have dedicated cable channels that devote their entire 24 hour broadcast to the financial markets. They are enlarging the problem by simply reporting it. And, of course, bad news sells ads. If all there was was good news, you probably wouldn’t watch. We humans thrive on worst case scenarios. Can you imagine the weather channel reporting, “It’s beautiful out, all sunny, have a great day!” No way, they are always spinning tiny clouds into possible tornadoes and tropical storms at some point always turn into Category 5 hurricanes, although few hit that way.
  2. Internet – The internet has allowed us to become so much more globalized than ever before. Now we know what the Asian markets did before our heads lift off our pillows. The bad news pouring out of undeveloped economies has made a bad thing worse.
  3. Law of Compounding – When you have more people, you’re bound to have more corruption. In 1980, the world population was 4.4 Billion. In 2008, we had 6.7 Billion. That’s 2.3 Billion more people around to either do good, or do evil. Say only 1% of those chose to do evil, well that means 23 Million of them are doing bad things. (The population of Ohio is 11.4 million.) Excess greed, which was bothering my client, is only 1 of many bad things they are up to.

My point? These 3 items I feel have magnified a problem that has existed even in the days of King Solomon. Greed is not a new concept, it is what ultimately destroyed the Roman Empire. So if the doom and gloom of present day happenings are keeping you up at night, spiking your blood pressure, and causing you not to invest in quality businesses at historic values, I simply say…chill, there’s nothing new under the sun.