No security on Earth; there is only opportunity.

Forget the bears, 2004 is the year of the optimist

Last Updated: 7:17PM GMT 30 Dec 2003


The big mistake I made in 2003 was not being optimistic enough. I spent too long worrying about threats, and not enough time seizing opportunities. I promise not to repeat this error. Next year will be different. :)
This time last year investors were dejected after a three-year bear market. War loomed on the horizon. Confidence was shot and things seemed to be getting worse. The world appeared full of many problems and few solutions. The doomsayers were in the ascendant.
And yet conditions really weren't too bad under the surface - but their appearance was fooling us.
For much of this year I listened too much to pessimists and shortsellers.
Of course things go wrong, but in the meantime the brave make progress and the worst never actually happens.
"Caution" and "safety" seem the mantra of our age, but they are not words to encourage innovation or wealth creation. As General MacArthur said: "There is no security on Earth; there is only opportunity."
Even as regulation and taxation destroy enterprise and jobs, the ingenuity and ambition of entrepreneurs overcomes these obstacles and allows civilisation to make progress.
There remain many difficulties, as ever.
The dollar is desperately weak; there is too much debt; government expenditure is too high; and business remains ferociously competitive. But these sorts of worries are not new - economists will always fret about something or other.
After all, there is always an excuse for not taking action. And in the meantime, the growing armies of the self-employed are taking the plunge and gaining their freedom - despite the concerns of the negative thinkers.
Indeed, if analysed on a scientific basis, most business undertakings are foolhardy, and many great entrepreneurs are crazy. Why struggle and risk losing everything, when you can settle for the comfortable life?
But the lust for adventure is unquenchable. The desire to break free from a mind-numbing daily commute and the indignity of permanent wage-slavery becomes overwhelming. The key ingredient - beyond skill and capital - is faith. If you believe in yourself and the future, then you will make it.
Prospects for the coming year seem sound. Various industries, like the media, technology and hospitality businesses, are unquestionably improving after serious recessions. The City has recovered its vigour.
People are sick of being gloomy and have started to buy and invest.
Although interest rates are gently rising, the housing market appears stable. The wreckage of the telecoms and dotcom crash has been cleared away and margins and sales are slowly picking up. Employment remains high and inflation under control.
What are the likely themes for 2004? Merger and acquisition activity will increase, as companies regain their confidence and start buying again. The continued growth of China will assume ever-greater importance.
Commodity prices will remain strong, with rising demand from a recovering world economy. Having cut costs, corporates will enjoy the benefits of operational gearing and see climbing earnings.
And President Bush will carry on pump-priming the US economy in order to get re-elected in November.
The search for value is as hard as I can remember. The world is still awash with liquidity, and beating the crowd will be a serious challenge.

(2009: Liquidity is there but the banks are not lending).
The easy gains of this year will not be repeated in 2004. Some of the irrational exuberance on display in the past six months will peter out, as investors get a bit more discriminating.
This is a good thing, as it should help prevent disappointments.
So the key lesson of the year is to ignore the cynics. It is too easy to be negative and predict disaster. But the world is infinitely adaptable and people endlessly resourceful. Despite everything our enemies throw at us, society will make progress in the next 12 months.
We should remember Winston Churchill's dictum: "I am an optimist. There does not seem too much use being anything else."
• Luke Johnson is chairman of Signature Restaurants



http://www.telegraph.co.uk/finance/2872520/Forget-the-bears%2C-2004-is-the-year-of-the-optimist.html