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6/10/04
Weekly Commentary by Dick Sears
Optimism vs. Pessimism

Part of Ronald Reagan's legacy to the American people was a timely reminder of the power of optimism. He came to the presidency at a time of doubt and confusion. By the time he left, our optimism was restored and we were once again able to accomplish great things as a people.

Optimism enables us to see opportunities and gives us the courage to pursue them. It sustains us when the going is difficult.

Pessimism sees the risks but not the rewards. It views human activity as a zero-sum game, with one man's gain another man's loss. If that were the case, we'd still be living in caves.

America, the land of liberty, has always been a haven for optimists. Their invention and production have created wealth that has spread throughout the world.

Most investors seem to be easily classifiable as either optimists or pessimists.

It is true that there is often money to be made by a pessimistic investor, since stocks go down as well as up. But over the long term, optimism must win. Stocks rise on the order of one million percent every hundred years. I don't know whether optimism and pessimism are characteristics we can choose. They may be beyond our control. But I do know optimism is preferable, both for the individual and for the society.

As President Reagan reminded us, optimism makes great things happen. We are in his debt.

Returns for Week Ended June 11
Gilder Technology Index (GTI): + 0.2%
Nasdaq Composite Index (NSD): +1.1%
S&P 500 Index (S&P): 1.2%