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John Mauldin: The World as We Know it is Changing, and Investors Need to Be Ready

John Mauldin sees change coming. A lot of change. And in his presentation at the Altegris Strategic Investment Conference (SIC) 2014, he laid out how change is only bad if you’re not ready

John Mauldin sees change coming. A lot of change. And in his presentation at the Altegris Strategic Investment Conference (SIC) 2014, he laid out how change is only bad if you’re not ready for it. Transformational changes will inevitably lay waste to those who are set in their ways. However, it can mean a bright, bold new world for those ready to identify change and embrace it faster than others.

“Our job, as managers of our portfolios… is to make sure that we are not part of the unintended casualties with unintended consequences,” he told a crowd of almost 500 investors at the Manchester Grand Hyatt in San Diego. “We can think and see them coming. … But the good news is: these transformations can be our friend. If we understand them, if we can see what’s happening, they’re just another tool.”

From there, Mauldin took things back to the African savanna of some millions of years ago and the early days of human evolution. There, early hominids weren’t ready to deal with change. They knew one way to live and they stuck to it. So, when Cro-Magnon man came along with a frontal lobe that could be used to make tools and begin to control the environment around him, the earlier hominids were fresh out of luck. They couldn’t adapt, and so it was that homo sapiens came to be the dominant species on the planet.

However, Mauldin, an contributor, doesn’t see that as being the end of that evolution. From there, Mauldin’s presentation delved into what he sees as the next phase of human development:

“I’m telling you today that homo sapien is an endangered species. You don’t want to be homo sapiens. I want you, today, to evolve. And it’s a cool thing, because you can evolve today because you have a frontal lobe. We don’t have to do a DNA change, we don’t have to have some cool stem cell therapy. We have to think. We have to become homo rationalis.”

As such, Mauldin encouraged investors to embrace the changes that are coming whether they like it or not. Most notably in the form of a variety of tremendous technological innovations sitting on the horizon and the accelerating pace of those innovations. Whether it be creating functional organs with stem cells, solar technology that will actually feature a better price point than fossil fuels, or automated cars, the current curve for technological achievement is rising exponentially.

And current technology can also create a new world. The smart phones we all carry around in our pockets could ultimately be a way for the world to untap the potential held in billions of people who previously lived in a state of poverty that prevented them from truly participating in the global information economy. The creativity of a child’s mind is not to be underestimated, and now, with a smart phone, that mind can access almost the entirety or human knowledge in a moment’s time.

So what does that mean? It means that investors have to be ready to accept a world they may not completely understand. Cro-Magnon man saw spears as an opportunity where early hominids did not. Homo sapiens then saw the opportunity in agriculture and civilization.

Now, Mauldin believes that homo sapiens may not be ready to see the opportunity in a rapidly changing world that will soon not look like they’re accustomed to. But homo rationalis should be excited for those changes to come, because it’s just another opportunity.