| I have friends who fall along all points of the political spectrum, from far left to hard right. I always try to listen to their arguments and viewpoints with an open mind. And I'm open to altering my own beliefs when they make a convincing case. Long ago, I adopted John Maynard Keynes' commitment to changing my mind when the facts dictate. But lately, I've noticed a growing and worrisome phenomenon among those at both ends of the spectrum. I'm talking about pessimism. Sometimes, it seems to be consuming our society... and driving people to extremes. Certainly, much of it comes from the media. Harvard professor Steven Pinker writes why journalism has a built-in bias toward the negative: Because bad things are sudden and newsworthy (a shooting rampage, a war, an epidemic), while good things are gradual and boring (a crime decline, a spreading peace, a longevity rise). In fact, Pinker is one of Chief Investment Strategist Alexander Green's favorite authors. Alex and I have discussed him several times, and Alex often recommends Pinker's books in his columns. Things Are Improving Pinker argues - using hard data, mind you, not anecdotes and exceptions - that poverty, racism, pollution and war have all declined over the decades. While measures of well-being, such as health, prosperity, knowledge and safety, have all increased. It won't surprise you that both the political left and the political right dislike Pinker and his stubborn optimism. My ultraconservative friend recently called Pinker's ideas "fake news." And last year, a left-leaning group of academics attempted to "cancel" Pinker. He is, apparently, insufficiently pessimistic. But this space is about investing, right? So how do optimism and pessimism impact our portfolios? Well, if you're truly pessimistic about the future, you probably don't believe that the economy will grow and prosperity and living standards will continue to rise. So why would you invest in companies that are by and large dependent on these waxing trends? You could short sell companies, I suppose. Short selling a stock is a bet that it will fall in value. But in a larger context, shorting is, in fact, an optimistic endeavor. In a free market, some companies are doomed to fail, whether they have bad ideas, bad management or just can't compete with other firms. Shorting those companies is a way of redirecting capital away from them and toward firms with better ideas, executives and products. In the end, shorting is a way to improve efficiency and bring to market better products and services at better prices. The stock market, remember, is a primary way our economy allocates capital to the best firms. Shorting is part of that long-term process. In the long term, the way to participate in the growth and success of good companies is to invest in them. If you're a partial owner - through ownership of shares - you will benefit if and when the company succeeds. And the companies that grow the fastest tend to be those that introduce groundbreaking innovations into our society: new drugs, farming methods, clothing styles, automobiles, internet apps... The list goes on and on. Like me, Alex is an unapologetic optimist. And in a new video, he convinces conservative commentator Bill O'Reilly why he too should be optimistic about the future. Alex also reveals the four innovations he's identified that will change the world in the next few years and reward the shareholders of companies based on them. You don't want to miss - no, you can't afford to miss - this one. And rest assured that I'll be recommending it to my pessimistic friends! Enjoy your day and stay safe, Matt P.S. If you're interested in hearing more about how negativity and pessimism can affect your financial stability, you'll want to check out what the Club's Chief Growth Officer Nathan Hurd has to say on the matter in his popular Survive and Thrive video series. Click here to watch his video. | 
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