This Easter, 100 years on, I'm wondering if the Twenties could roar again
KICKING OFF THE 20TH CENTURY
The early part of the 20th century was an exciting time to be alive. With the development of electric railways, subway trains, and the mass production of double-decker buses, people could travel inexpensively and comfortably.
The art of cinema was finding its feet, films became longer, and movie theatres became a good way to spend a night out. A bourbon-laced Old Fashioned was the cocktail of choice at the time, before your newly invented vichyssoise was served. People suddenly dined out a lot.
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Household electrical goods were popular by the 1910s as vacuum cleaners and washing machines became available, suburban homes were hooked up to mains electricity, and consumers could also buy refrigerators and early air conditioners. Another hot product was the telephone, with millions of homes connected for a chat. And what better thing to chat about than the news, back in the heyday of the newspaper business?
Assembly-line mass production made cars affordable and put them within reach of many more families. But to travel long distances, you'd likely opt for a cabin on a luxurious ocean liner such as the brand new Titanic, or perhaps even a rigid airship. It was at this time that tea bags and instant coffee first arrived on grocers' shelves. Aside from the lack of consumer electronics, one can imagine that life back then wasn't all too different from today.
The train of progress was steaming ahead - and then was brought to a screeching halt by a war and a pandemic.
CAUGHT UNAWARES
My grandfather was born in 1910, just before World War I, and while he was still a child, the world was also caught unawares by a global pandemic.
A variant of the H1N1 virus, the Spanish Flu infected about 500 million people worldwide, claiming between 17 and 100 million lives - nobody really knows for sure. With a global population of about 1.7 billion at the time, that was a significant percentage, coming just on the heels of the losses in the Great War.
Having survived the Great War and the Spanish Flu, grandad moved on to happier times: marrying a local girl and starting a family that grew to three sons and a daughter. However, the world was soon at war again and he was called up, joining the Royal Marines as an anti-aircraft gunner in North Africa and Europe. He shot down German bombers flying at him.
Having never experienced war first-hand - though I saw one live on television in 1990 - or even caught as much as a cold in the past year, I complain that the pub is not open. Shame on me. Thinking of those difficult times two generations earlier makes me very grateful for the world in which I grew up and had a family.
The Spanish Flu trampled on economies, but it eventually passed, and the period of "normality" that followed became known as the Roaring Twenties - the perfect antidote to the preceding six years. Economies exploded again as people, sometimes literally, went berserk.
OPENING THE FLOODGATES
As pent-up demand was released in 1921, it unleashed a wealth boom and almost a decade of significant inspiration, creativity and fantastic fashion that has not been rivalled since. What a time it would have been for my grandparents, being teenagers and getting married in the thick of it all.
This has made me think that if history would please kindly repeat itself, we may have a few interesting years to look forward to, both culturally and financially.
To explore my hypothesis further, I thought it would be interesting to take a quick look at the US stock market, the Dow Jones Index (DJI), in the early part of 1900s - before, during, and after the Spanish Flu.
From 1901 to 1919, the DJI rallied 150 per cent. Though the drivers during that period were different, it's interesting to note that stocks collapsed following a US banking crisis in 1907 as speculators tried to corner the copper market and borrowed heavily. As they defaulted on loan payments, the banks came under severe stress and sent stocks into a tailspin. Doesn't that sound all too familiar? It led to the creation of the Federal Reserve Bank, which bailed Wall Street out of a similar mess in 2008.
The DJI halved by the summer of 1921 in a period of economic stress and deferred spending induced by the pandemic. Emerging from this, the economy and markets went on a tear as consumption ballooned. Having been pent up and frustrated, people travelled, borrowed, and leveraged up to buy stocks. The martini-soaked Roaring Twenties led a near-500 per cent rally in the DJI before crashing in 1929.
Our grandparents suffered through two world wars and the Spanish Flu, and still managed to rebuild. While we've had to contend with our own destructive pandemic, which will pass, we haven't seen a major war for years. The sabre-rattling in this corner of the world is something we've got used to. Hopefully that's all there's to it.
THE ROARING TWENTY-TWENTIES
So while I'm at home this Easter, somewhat grumpy that I'm not free to do exactly what I want with the five-day weekend, I'll be digesting what my grandparents went through some 100 years ago, and while hoping for better times I'll pay homage and enjoy some jazz, dry martinis, and scalloped potatoes - all products of the fabulous 1920s.
If we learn from history, avoiding conflict and ridding ourselves of the pandemic, I wonder if we could be in for something like a rerun of the Roaring Twenties? The economic forces at play may be different, but the sentiment of people may turn out to be similar. We could be in for the most exciting period this century.
Neil Newman is a thematic portfolio strategist focused on pan-Asian equity markets
This article originally appeared on the South China Morning Post (SCMP).
Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.
