The Garrulous Jay – On Speed

The 21st January this year marked the 50th anniversary of the Anglo-French supersonic airliner Concorde entering service.

With its distinctive droop nose and delta wing formation, Concorde was expected to usher in a new age of global travel. Passengers would be able to leave Europe in the morning for a day’s meetings in the US, and then if they wished head home that evening.

Yet half a century on Concorde has been consigned to the annals of aviation history and there is no supersonic passenger plane in the air today. Perhaps there is a lesson for us here.

Following the fatal crash of Air France flight 4590 on the 25th July 2000 and the 9/11 attacks in 2001, demand fell and by October 2003 Concorde had been retired.

Concorde epitomises our species’ peculiar obsession with speed. Indeed, getting from A to B more quickly has arguably been the over-riding objective of all transportation innovation. It brings with it prestige, glamour and a sense of economic progress.

It is why the UK is currently saddled with the £40 billion white elephant of High Speed 2.

But perhaps the need for speed runs deeper. Perhaps it’s because we call ourselves the human race.

Speed dominates the world of sport. The blue riband event in athletics is the 100m: the competition to become the fastest man or woman on earth, and many sports records are about doing something quicker than it’s ever been done before.

To be fast is to be the best.

Coming back to the world of economics, one of the key measures of success is productivity, and improvements in productivity are achieved by increasing total output for a lower level of input, with one of those inputs being time.

Speed is also at the epicentre of technology. How quickly we are able to access and exchange information through improvements in technology has been a defining measure of progress in computing.

The way this can be harnessed in finance is brilliantly described in Michael Lewis’s book Flash Boys, which describes the activities of ‘high-frequency’ traders in the US.

Less healthily, speed is also at the heart of what drives social media: the ability to provide a constant stream of stimuli that trigger the dopamine hits that keep people scrolling, satisfying the implicit hunger for a psychological quick fix.

In the activities of the flash boys and across social media we can also see a crossover into the world of investing. This is the world in which ‘investors’ literally seek to make a fast buck.

But Rome wasn’t built in a day, and neither are brilliant businesses. They take time…and people, vision, strategy, tenacity and, yes, investment. First coined in the 1980s, the term ‘patient capital’ describes a longer-term approach to investment. One where investors are rewarded for taking risk over years, not weeks or months.

Amidst the fear and euphoria of today’s capital markets we would do well to consider speed. To remember it was the tortoise that won the race, not the hare, and that Concorde is now consigned to museums.