Fifty years ago, at 7:50 am (Eastern Time) on April 26, 1962, mankind made its first impact on the moon when Ranger 4 crashed onto the dark side of the lunar surface. Ranger was designed to send pictures from the moon, but that part of the mission failed: One small misstep for man, but one giant leap for mankind.
Three days earlier, on April 23, the 730-pound Ranger capsule was perched atop an Atlas-Agena B rocket to begin its 64-hour, 250,000-mile jaunt to the moon. Ranger was the first of many tentative steps along the road to fulfilling President Kennedy’s mandate to put a man on the moon and bring him back safely by the end of the 1960s. My father was closely involved with that dream as a design engineer and project manager for Boeing*. He worked in three states on the booster rocket that lifted our astronauts into space.
Ranger’s launch was timed to coincide with the April 21 opening of the Seattle World’s Fair, which focused on the role of air and space in the creation of a wonderful world of flight. As a Seattle kid, I remember it well. Gravity seemed to be our last frontier. I remember the gyro-copters, the rocket back-packs, the elevated Monorail, a flying saucer on sticks called the Space Needle, and the promise of high-speed “air cars” that would soon cloud our skies. The Fair was a glorious playground from April 21 to October 21, 1962. By the time it closed, “Century 21” had greeted over 10 million visitors, and even made a profit!
President Kennedy marked the opening of the Fair by telephone. At the time, he was far more concerned with the price-fixing schemes by U.S. Steel than with our faraway fairground. (Read more about that in my last blog). Six months later, on the day the Fair closed, President Kennedy had to back out of his promised Seattle appearance due to a “bad cold,” but the truth was that he was fighting a high-stakes game of chicken with the Soviets over their Cuban missiles.
Ironically, the Seattle World’s Fair anticipated the October Cuban missile crisis. Visitors were channeled through a 40-second “Bubbleator” to enter the “world of tomorrow.” Before reaching tomorrow, however, we had to view “The Threshold and the Threat,” featuring images of a desperate family in a fallout shelter on one panel, followed by a perfect new world. We were invited to choose between destruction and life. Our visual cues were a mushroom cloud and a photo of Marilyn Monroe – not a very difficult choice!
Meet the Jetson’s
The Jetsons was a prime-time ABC cartoon series launched in 1962 and set in the “Orbit City” of 2062. The opening theme was jaunty: “Meet George Jetson, son Elroy, daughter Judy, and wife Jane.” That cartoon family was not very far removed from the future imagined at our Seattle fairgrounds. Even as we look back at the 1962 photos, we see crew-cut men in suits and ties inventing ever-more exciting toys, while wife Jane is relegated to a space-age kitchen. So, short-term, the Fair missed seeing feminism, civil rights, the Beatles, long hair, draft riots, and hippies.
Fifty years later, the Space Needle still smiles on Seattle, but the Monorail is chronically broken. There are no air cars, rocket packs, or gyro-copters crashing into each other. We haven’t put a man on the moon since 1972. Seattle’s 1.2-mile Monorail never caught on, suffering several accidents and reversals at the ballot box. But our skies are filled with something better – Internet “hot spots” and cloud computing!
We were already on the road to personal computers and the Internet by the time the Fair opened. On April 25, 1961, Robert Noyce was awarded a patent for the integrated circuit – a chip of electronic components in semi-conductive material – the start of the Computer Revolution. In addition, we sowed the seeds for free access to knowledge in the sky 20 years ago when Tim Berners-Lee, a British computer scientist working at CERN in Geneva, created the entry code (you know: http://www) to the knowledge-sphere.
50 Years Later, the Air is filled with Data – Not Cars
On April 30, 1992, the “www” Internet preface became open territory when CERN released World Wide Web technology to anyone, with no fees. Imagine what we’d be missing today if this knowledge in the sky were a government monopoly from the start. Soon after the Web was born, governments tried to fix our unbroken sky by populist measures like The Communications Decency Act of 1996, which called for $250,000 fines and jail terms of up to six years for “anyone who uses interactive computer networks” for “indecent” purposes. (You can buy books, but quoting them on the Web could send you to the slammer.)
Thankfully, the Supreme Court struck down the CDA in March 1997, but Congress is still trying to get its nose into your computer. Just last year, we faced two more bills aimed at Internet control: the House’s Stop Online Piracy Act (SOPA) and the Senate’s Protect Intellectual Property Act (PIPA). They looked sure to pass into law until tech giants Google, Wikipedia, and Facebook launched a massive backlash.
My main point is that the future seldom happens as we envision it, and that’s a good thing. I wouldn’t want to live in either a bomb shelter or an aerial utopia filled with drunk drivers in the sky. Likewise, the world of 2062 will not be anything like what we envision today. New inventions, now inconceivable, will enter the world and ease our passage through life. (Today’s social blind spots will also be revealed.)
Therefore, it pays to be positive for reasons that nobody can explain in specific detail. Tomorrow will be better, but I can’t tell you why – not yet. The safest bet is that the ascent of man will continue. It is the greatest megatrend in history, but nobody in history has yet published any clear-eyed view of our future.
Investment Lessons from the Changing Corporate Landscape in Seattle
Now, let’s take a practical look at all this history and attach some stock names to the story. Back in the 1960s, Seattle was a one-horse town. Boeing dominated the employment picture then. But from 1969 to 1972 – the moon-landing years – the payroll at Boeing shrunk from 102,000 to 29,000. There was a sign on the new Interstate 5 heading south that read, “Will the last person leaving Seattle please turn out the lights?” Once those crew-cut engineers put a man on the moon, apparently, they became expendable.
Who could have guessed, in 1970, that Seattle would give birth to a half-dozen giant corporations built around the land-borne comfort of yuppies? First came Microsoft* (MSFT), then McCaw Cellular (which became AT&T Wireless, merged back into Ma Bell). Then came designer coffee at Starbucks* (SBUX), bulk-purchase giants Costco* (COST) and Amazon* (AMZN) and upscale retailer Nordstrom’s (JNW). Meanwhile, Boeing flew off to Chicago, so Seattle’s largest manufacturer today is Paccar Inc. (PCCR), maker of earth-bound heavy-duty trucks, not gyro-copters, air cars, rocket backpacks, and jet-mobiles.
As you can tell from the four-letter symbols attached to most of those company names, most fresh ideas are still hatched on the tech-heavy NASDAQ, which has had a good run in the last three years. Recently, NASDAQ suffered a five-day slump – falling even when the other indexes rose. Last week, the Dow gained 1.4%, the S&P 500 gained 0.6%, but NASDAQ lost 0.4%. NASDAQ is still over 40% below its peak, set 12 years ago, while the Dow is within 10% of its high and the S&P is just 13% off new highs.
This tells me that technology stocks are still beaten down. While individual companies may come and go – with capitalism wreaking creative destruction at every turn – big money still comes from big new ideas.