For those of you who would prefer to listen:
Apple introduced its first mixed-reality headset at its annual Worldwide Developers Conference this week. It launched a new era of what CEO Tim Cook called “spatial computing.” The sleek, digital goggles seemingly take you to another world. Or perhaps more accurately, that virtual world comes to you when you put the headset on and take a break from reality. The Vision Pro is Apple’s first new device platform since the Apple Watch went on sale 8 years ago. It’s basically a face computer. The cost is a tidy $3500. It’s definitely not for everyone.
The mixed-reality launch had a surprise guest. Disney CEO Bob Iger took the stage too. Apple is partnering with Disney with this Vison Pro device. Iger discussed the many opportunities ahead for his company’s coveted characters and content. Apple and Disney have a long history together. Steve Jobs ran Pixar before Disney bought it. Tim Cook was on Disney’s board. There is a large overlap in customer base. Apple has been expanding into entertainment. Sports is a natural next move. Disney owns ESPN, with rights to every major sporting event. Rumors are circulating again about the strategic pairing of Apple and the mouse. Who knows if that ever becomes a reality. Regardless, both companies are supremely focused on innovation and delivering for their customers.
Technological innovation is both revolutionary and evolutionary. Realistically, we will not be walking around with smartphones years from now. The daily digital device of the future will likely be hands-free, potentially wearable and almost certainly smaller. It won’t be a phone. In fact, don’t you think it’s kind of ridiculous that we still call them phones today, considering the majority of users seldom connect their ears and mouths and use them as telephones?
Moore’s Law is still a reality. The concept outlined by famed Intel CEO Gordon Moore stated back in the 1960s that the number of transistors in an integrated circuit doubles about every 2 years. Moore’s Law basically claims that the speed and capabilities of computing increase every other year, and costs continue to decline over time. It has proven accurate throughout Tech. Look at the dramatic decline in prices for computers and televisions, while their capabilities are increasingly greater. The iPhone is more powerful than the computers that supported the Apollo Missions to space. The first smartphone weighed 2.5 pounds. It was 8 inches long and required 10 hours to charge, allowing for 30 minutes of talk time. All at a cost of $4,000. That was then. How things have changed.
The rollout of the “augmented reality” device got me thinking about the word “reality.” What does it even mean anymore? Things that are real today seemed unthinkable decades ago. For the good and the bad. The ability to purchase something from your couch at any hour with next-day arrival has been a reality for a while. We get used to it, but it wasn’t always the way. It’s a 24/7 world we live in. Getting money meant you had to go to the bank, when they were open. We can communicate and share stories with friends and loved ones easier than ever. Booking a flight and planning a trip makes us all personal travel agents with vast resources and possibilities. The Digital Age has brought so much advancement to our daily lives. That’s real.
Reality TV was all the rage at the dawn of the new millennium. Shows like Survivor, Jersey Shore and the Apprentice attracted large audiences. Rich kids like Paris Hilton and the Kardashians became celebrities with their own reality TV shows, which clearly were anything but real. The notion that perception is reality seems so accurate these days. Everything’s become political. Agendas are everywhere. It wasn’t that long ago that the term “alternative facts” arrived, and it never left. It was a puzzling term then. It’s puzzling still.
Planet Earth has seemingly always been a complex place. Today, it’s especially the case. Stresses abound political, geopolitical, social, and economic. Problems are plenty. Chief of them: Problem solvers aren’t given much of a chance. Ideas get knocked down quickly. Listening is a lost art. Yelling dominates the scene. Agendas are rigid and stubborn. Information gets manipulated and twisted. It’s hard to tell what’s accurate. True leaders tell people what they need to hear, even if they don’t want to hear it. There’s not much appetite for that. Churchill was right then and still: Lies travel halfway around the world before the Truth has a chance to get its pants on. Tis true, the truth can be inconvenient. And it can hurt. But it’s essential to know and understand truth.
Hollywood has long been the center for storytelling and personal escapes. The movie theater was that place. Inspiration often shows up. Wishing upon a star and daring to dream is as real as real gets for kids, young and old. Those with passion would take that inspiration and run with it, seeking opportunity and a better life. Silicon Valley is ground zero for innovation. Today, a segment of the population is drawn to augmented and artificial reality instead of the real real. The blending is distorting what’s real, what’s sort of real and what’s not real at all.
America has an obsession for labels it seems. Blue and Red. Black and White. Rich and Poor. Young and Old. In reality, what it’s really created is Us versus Them. There’s always someone else to blame. Compromise has become a bad word. That’s a dangerous situation to divide the nation. As they say, we’ve discovered the enemy; The enemy is us. It’s hard to dispute that claim today. The rest of the world is watching what’s happening in America. Some watch with great dismay. Others with tremendous joy. A former American President has been indicted. That’s a reality that isn’t worth celebrating.
America’s birth came with a commitment to Life, Liberty and the Pursuit of Happiness. Jefferson wrote these words in the Declaration of Independence. The thing is; Happiness is not guaranteed. It’s also really tough to define. What is happiness? What brings happiness? The answers are so wide and different, depending on whom you ask. For the vast majority of Americans, the answer is probably pretty simple and timeless. Most people merely want a fair opportunity in life for success for themselves and their families. It’s that opportunity to pursue happiness. Not everyone has. Not everyone does. Unfortunately, it’s as if some people have stopped pursuing happiness. They prefer anger and division. You can’t even debate anymore without hostility breaking out. Temperatures need cooling.
Throughout history, every great society has collapsed when they overextended themselves. Reality got distorted. Overconfidence and complacency set in. It happens slowly and incrementally increases without knowing. Like a frog in a boiling pot. The great societies squandered their relationships with the truth. What had been a land of opportunity became a land of entitlement. Life and Liberty are undeniable. Those words are carved in stone in the Declaration, though it’s a daily challenge to ensure there’s indeed justice for all. That’s seemingly always going to be an issue, as humans are complex beings. But it’s that pursuit of happiness that gets twisted over time to what many believe should become guaranteed. We can’t forget from where we’ve come. We aren’t perfect; Far from it. But serious progress has been made. If we stay the course on this Great American Experiment, more progress lies ahead. Teddy Roosevelt reminds us that “We inherit as free men (and women) this fair and mighty land only because our fathers and forefathers had iron in their blood.” Land of opportunity. Land of the Free. Home of the Brave. Those are important words.
The reality is, America is the land of opportunity and operates under the rule of law. That requires a great deal of respect and trust. Those 2 qualities have frayed big time of late. People have lost confidence in the system. We the people don’t always see eye to eye. That should be our strength; Honest dialogue with diverse perspectives is designed to help us be more perfect. We all know perfection doesn’t exist, but our greatness lies in our constant pursuit.
The Market is a living, breathing animal. It is influenced by human emotion but is driven by truth and the simplicity of supply and demand. It’s the purest form of price discovery. The Market matches buyers and sellers to establish fair prices. That’s the level where buyers are willing to buy and sellers are willing to sell. Of course, like any human institution, it’s susceptible to manipulation. Since the very beginning, formed under that buttonwood tree beside the wall in lower Manhattan, people have tried to game the Market. Greed is as human as anything out there. But rules are in place and laws are enforced. That’s the only way the system works. But it sure ain’t perfect.
The government response to the Financial Crisis set a new course for the Stock Market. There was some seriously reckless activity which led to a levered real estate bubble. The financial system nearly broke. In 2008, Big Banks were deemed too big to fail. Though not every financial institution was complicit, a firebreak was formed. Banks not named Lehman were saved and restored. The collateral damage devastated all. And the fact that no banker or financier ended up in handcuffs for contributing to the crisis still remains an issue. The message was that rules didn’t apply to all. That’s a confidence buster. It naturally fed into resentment towards the establishment. Then came Brexit followed by the rise of both Bernie Sanders and Donald Trump. They offered substantially different styles with somewhat similar messages: The system was failing the people. It resonated with people in both parties. The system only works with broad-based trust. When everything starts getting questioned, the system breaks down. It’s incredibly important to understand this. That’s certainly the reality we face today.
The Federal Reserve took interest rates to zero in 2008 to help avert a financial collapse. Those were emergency measures that worked. Another problem; They overdid it. The Fed’s commitment to zero percent interest rates kept the price of money cheap, which encouraged more reckless behavior for a decade and a half. Price rises were artificially formed. The result has been a series of asset bubbles, which never end well. That’s been the experience for investors in the 2020s.
The Market is finally fighting back. Interest rates are a long way from zero. The transition back to real is upon us. Natural cycles are returning. Rampant inflation has cooled quite a bit, but it’s still high compared to the decade behind. Asset prices have increased markedly from the lows of 2022. The Fed is showing signs of putting an end to its aggressive rate hikes. The Economy has been beyond resilient. But there are plenty of issues that need addressing. Reality ultimately sets in.
Our Federal government came together again last week to avert another crisis. There was a deal on the debt ceiling. That’s the good news. We still have $31 Trillion in debt. It’s never been that high. That’s the not-so-good news. In addition, Americans are now sitting on nearly $1 Trillion in credit card debt. That’s a record high too. There’s also the issue of Social Security and Medicare. Both are on track to run out of funding within 10 years. They’re political issues deemed of the 3rd rail variety. Nobody wants to deal with it. Can kicking is the Congressional way. The reality is the math doesn’t work. It hasn’t for a while. The truth is extremely inconvenient on this subject. It has to matter. It has to matter soon.
2020 means clear vision. The 2020s have been anything but. Reality is quite distorted. The universe has been sending messages. Covid could have been that thing that finally brought us together. It was the opposite. Things got even worse. Mother Nature has been pushing back. If the 2020s had a cartoon character representing it, I submit it would have to be a cross between Yosemite Sam and Mr. Magoo. That represents clumsiness and conniving with buffoonery and a whole lot of anger. That’s not a good reality.
Headlines have long been designed to grab attention. It’s most commonly news that’s bad. The old saying “if it bleeds, it leads” has been taken to a whole new level. Misinformation runs rampant. Credibility is constantly called into question. Cable news and social media fuel the friction. Good news almost always gets overshadowed by bad. We need to shine a light on the good. The good need more friends. There’s a ton of good out there. It’s not hard to find.
The case for optimism is real. America always does the right thing. The frustrating part is it usually comes after trying everything else. That’s my second Churchill reference for the day. Every year, around the Holidays, I write a poem. Many of you know it. I always end with these words that get me excited and motivated. I hope they work for you too. It’s a message we could all use and lean on this weekend. It goes like this:
The American spirit is peerless, time-tested and true
With perseverance and sound leadership, there’s nothing we can’t do
With crisis brings opportunity, history has shown
Success through ingenuity, it’s the fabric of our home
Perhaps “We the People” could all look in the mirror. It’s a useful tool. Problem solvers to the rescue. We need more of them. Problem solvers don’t blame. They explain. Solving problems requires putting your finger on the issue first. Then collaborate with the goal of a solution to solve. It can’t always be someone else’s fault. Seek the truth. Learn from the truth. The truth does hurt at times. But the rallying cry when I was a kid was no pain, no gain. There were no participation trophies back then. There was no award for second place. I know I sound old and cranky saying this. I’m shaking my head as I type, but it’s the truth. We could all benefit from dealing with the truth. Feedback is the breakfast of champions. Constructive criticism is like beef jerky. It can be hard to chew and tough to swallow, but it’s full of a lot of good stuff for you.
Investing for a better tomorrow is Bedell Frazier’s professional purpose. We are invested in artificial intelligence and virtual reality. Disruptive innovation is a constant. The key is to try to understand it best you can and get in front of it. The AI Revolution could be bigger than anything we’ve seen, for better and for worse. But it’s coming. Actually, it’s already here.
Equally important, we keep investing in human intelligence and authentic reality. We are investing in the next generation. We invest in people with strong values and work ethic that want to make a positive impact on other people’s lives. Our beloved Nancy Tredwell is taking a Summer Sabbatical to spend time with her family and friends and reflecting on the 30+ years of high-quality service she has provided to our clients and our firm. In addition, Cameron Jamison formally started his career this week after 2 years of internship and graduating from Cal. Cameron has a drive and a work ethic that’s infectious. His intellectual curiosity is like few I’ve ever seen. I encourage him to chase that curiosity, because it’s going to take him to a really good place.
The Bedell Frazier story is an evolutionary one. We believe it’s a story of success. We’ve faced our share of adversity. But that’s where opportunity lives. I find that true character comes out and the successful rise in the face of adversity. That separates the great from the good. Try new things. Think different. It always starts with an idea that gets turned into action. Of course, those action plans don’t always lead to success. Plan B’s are essential too. Thomas Edison taught us that failure only happens when you give up. At Bedell Frazier, failure’s not an option. We’ve just found 10,000 ways that didn’t work, and counting… Now that’s the reality that we live in. Our eyes are wide open. Our brains are active and engaged. If you’re not learning something new every day, you’re doing it wrong. We’re in the Business of Life and we live in reality; The real real. That won’t stop. We like it that way.
Have a nice weekend. We’ll be back, dark and early on Monday.