1996: The Year The World Changed

A pet theory of mine with which I’ve been boring people for years. Here’s what happened in that momentous year.

When I’m not talking people’s ears off about Strauss-Howe Generational Theory, I’m trying to convince them that 1996 was The Year The World Changed.  There’s not much prose in this post; I’m just going to extract the text from a four-slide Powerpoint deck I’ve been refining for the better part of past seven years and see what people think.  Bottom line: Pre-1996 investing was about gathering potentially useful incremental nuggets of information.  Post-1996 it’s been all about filtering things out.  Here’s what happened in that momentous year:

January - Motorola StarTAC flip-phone launched. Small and light, it was the first mobile ‘phone to gain widespread adoption, with circa 60 million units sold. Small and light, it was one of the first phones with a vibrate feature and a lithium-ion battery option. Initial price: $1,000.

January - Larry Page and Sergey Brin, PhD students at Stanford, begin a research project on how to rank search terms more effectively than simply counting the number of appearances. Their “PageRank” determination of a website’s relevance evolved into Google.

February - Telecommunications Act of 1996 passed, overhauling the Communications Act of 1934. Along with including the internet in broadcasting and spectrum allotment, controversial Title 3 “Cable Services” allowed media cross-ownership, and ignited a wave of consolidation, monopolization, and homogenization of radio and television.

May - Having just announced itself to the public in October 1995, Amazon.com incorporated in Delaware in preparation for its 15 May 1997 IPO at $18.00 per share ($1.54 split-adjusted) … 20 years later the stock reached $986.50 +63,958% or a CAGR of 38%.

June - After, as a member of city administration, Vladimir Putin manages a failed election campaign for the Mayor of St. Petersburg, after which he moves to Moscow and is appointed deputy chief of the Presidential Property Management Department; the following year Boris Yeltsin appoints Putin deputy chief of the Presidential Staff, a key step in his rapid rise to the Russian presidency.

July - Hotmail launched on 4 July symbolizing “freedom from ISP-based email.” It was one of the first webmail services on the Internet along with Four11’s RocketMail (later Yahoo! Mail), and had 8.5 million subscribers within a year. It was later sold to Microsoft for $400 million.

July - TWA 800 crashes off Long Island. In November, former White House Press Secretary Pierre Salinger calls a press conference and cites “a widely accessible e-mail letter that has been circulating for at least six weeks on the Internet's World Wide Web“, which is perhaps the first instance of internet conspiracy theories entering the mainstream.

August - Having been expelled from Sudan, Osama bin Laden moves to Afghanistan and writes "The Declaration of Jihad on the Americans Occupying the Country of the Two Sacred Places," a call for the removal of American military forces from Saudi Arabia.

October - Fox News launched by Rupert Murdoch and former Nixon campaign advisor Roger Ailes to act as a de facto agitation and propaganda arm for the Republican party. It pioneered the use of cropped or fabricated quotes, exaggeration of crowd sizes, amongst other “post-factual era” tactics.

December - Apple Computer buys NeXT computer for $429 million and 1.5 million shares of Apple stock, and Steve Jobs returned to the company he co-founded in 1976.

Also in 1996:

OxyContin, the opioid prescription painkiller, was indtroduced by the Sackler family’s Purdue Pharma. The drug was marketed as safer than alternatives; the US Food and Drug Administration said the drug was less prone to addiction than alternatives because of the controlled release, despite Purdue declining to do any clinical studies on the drug’s addictiveness.

The Mount Everest disaster occurred when eight climbers caught in a blizzard died on whilst attempting to descend from the summit. Over the entire season, 12 people died trying to reach the summit, making it the deadliest season on Mount Everest at the time, and raising questions about the commercialization of Everest.

The Nintendo 64 videogame console was released, along with its launch and most popular title Super Mario 64. It was the last major home console to use cartridges as its primary storage format, and Nintendo shipped almost 33 million units over its six-year product lifespan.

Bandai released the Tamagotchi digital pet, which quickly became one of the biggest toy fads of the late 1990s and the early 2000s, and sold over 76 million units through 2010.

Dolly the sheep, the first mammal to be successfully cloned from an adult cell somatic cell using the process of nuclear transfer, is born at the Roslin Institute in Midlothian, Scotland.

The Billboard Hot 100 pop singles list included “Macarena” by Los del Rio at #1, “Give Me One Reason” by Tracey Chapman at #6, “Missing” by Everything but the Girl at #12, “Ironic” by Alanis Morissette at #13, and “Change the World” by Eric Clapton at #20.

Top Nielsen TV programs included “ER” at #1, “Seinfeld” at #2, “Friends” at #4, “NYPD Blue” at #13, “Fraiser” at #16, “Spin City” at #17, and The Drew Carey Show” at #18.

Stock Indices 1 Jan 31 Dec %chg
MSCI World 734 820 +12%
DJIA 5117 6448 +26%
NASDAQ 1060 1291 +22%
S&P 500 615 741 +21%
CAC 1874 1990 +6%
DAX 2271 2889 +27%
FTSE 3689 4119 +12%
Nikkei 19946 19361 -3%

"I have a foreboding of an America in my children’s or grandchildren’s time — when the United States is a service and information economy; when nearly all the key manufacturing industries have slipped away to other countries; when awesome technological powers are in the hands of a very few, and no one representing the public interest can even grasp the issues; when the people have lost the ability to set their own agendas or knowledgeably question those in authority; when, clutching our crystals and nervously consulting our horoscopes, our critical faculties in decline, unable to distinguish between what feels good and what’s true, we slide, almost without noticing, back into superstition and darkness." -- Carl Sagan, "The Demon-Haunted World", Feb 1996.

“I have a theory that technology should’ve stopped right around 1995. We could cure enough diseases, cars were good enough, it was right around there we should’ve just stopped … and we’re not. We’re going to keep going; I don’t know where any of this goes.” – Bill Burr, 2017