Life in the Fast Lane

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In the time it takes to read this sentence, the global financial market has already changed. Material information has been read, and trades have been placed. Contrast this to a few centuries ago when it could have taken months to learn of an investment opportunity, only to find that the information was false, incomplete, or too late to act on.

One of the earliest examples involved the Dutch East India Company in 1608. Think massive, pirate ship-looking boats taking dangerous trips from the Netherlands to Indonesia and bringing back spices. It was the first company that offered what we know as stock ownership today. If a ship returned with spice onboard, a part of the profits was yours.

Traders would gather on a bridge in Amsterdam and exchange shares in the company. Embedded in these conversations were rumors that spread like fire. "I heard one of the ships sank" or "One of the boats is returning with a full shipment." There was no way to know. Voyages could take over a year and investors simply had to wait, hoping that if their conviction lasted long enough, profits would arrive one day.

The speed of information got faster over time, but it was only in the past couple of decades that things really started to pick up. After celebrating his 50th anniversary at Fidelity, Peter Lynch was asked what he felt had changed most about investing:

It's an enormous leap forward from Lynch's early days and most definitely the 1600s. Billions of people are inundated with updates at every waking moment. Within one second, a piece of information can be seen by hundreds of millions of people. A single tweet can send ripples through global markets (shoutout to Elon). Markets react to economic data from the Fed as quickly as Jerome Powell can present it.

This luxury of the digital age makes it feel like things are moving faster. When information moves faster, history seems to follow suit.

We now live in this dichotomy where The Current Thing has a larger intensity and smaller duration. Events go supernova and dissipate in days. It's a phenomenon not limited to any one area of culture - just look at the most popular search terms over the past two years:

We see pop culture, technology, sports, politics, and war. Most of these were the center of our world during peak popularity. The group chat pops off and the collective internet is synced up in discussion.

It becomes small talk, "Did you see this FTX thing?", "Wow there's a ship stuck in some canal", "I've been watching this show called Squid Game" And then poof, the conversation shifts when something new and seemingly more interesting comes along.

It's not necessarily a good or bad thing, it's just how communication works. Historically speaking, the speed at which ideas spread is crucial to our continued progress as a civilization.

Gutenberg's work in the 15th Century is the most obvious example. His invention of the printing press paved the “information highways” for the Renaissance, the Age of Enlightenment, and the Scientific Revolution. It laid the groundwork that underpins our present-day economy. The printing press is one of many pivotal examples on this exponential line of progress:

Whether it was Reuters using a fleet of carrier pigeons to deliver news and stock prices across Germany in 1850, or the Bloomberg Terminal hitting the market in 1982, information has been steadily democratized throughout time.

They say the winners write the history books because the narrative of humanity's past is maddeningly skewed toward what survived. Most of what once existed is gone, and history serves as the repository for the 0.01% that stood the test of time.

That's no longer true today. We've gone from 99.99% of human history being undocumented to now, when information travels at the speed of light and every moment can be effortlessly archived.

The Russian invasion of Ukraine is the first major conflict to take place in a fully-fledged digital age. During the initial invasion, the internet was flooded with combat videos, traffic maps, and real-time updates from citizen journalists. This media was something past generations couldn't have imagined seeing, in perfect resolution nonetheless.

In fact, photos from WWII were not widely seen by Americans until three decades later when Life Magazine released its collection to the public. Trung Phan wrote an incredible post elaborating on the historical significance of today's conflict.

Queen Elizabeth's Wikipedia page was updated mere seconds after her death. In those seconds, someone had to read the announcement from the Royal Family, go to Wikipedia, update her information, and submit it. The user was congratulated by other editors, with one saying, "I have to congratulate you on being the first past tense edit to Queen Elizabeth II. Very impressive speed."

The first FIFA World Cup took place in Uruguay in 1930 and very few people had immediate access to information surrounding the matches. Written match reports were sent via ships to Europe and in the case of the final, reports didn't reach Europe until 27 days after the match. Imagine not knowing the result of a sporting event until nearly a month after it took place.

Less than a hundred years later, we fast forward to last month's World Cup and the speed of information is unfathomably faster:

It's safe to say that we're living in the age of information overload, where a single tweet can make or break a company's stock price and a random video can become a cultural phenomenon overnight. It's a double-edged sword - on one side, we have the pulse of society at our fingertips, and the unprecedented amount of information that comes with it, but on the other, it feels like events and ideas are merely a flash in the pan.

From pigeons to push notifications, the democratization of information has changed the game in countless ways and will continue to shape the course of history. The next time you feel overwhelmed by the constant influx of information, just be glad your investment hopes aren’t hinging on a leaky ship in search of pepper.

-Sam

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