About Murray Cass Expertise I am eager to help investors find their way through the muddle of tech investing. I can answer questions concerning tech investing, financial reports, stocks, and options. Having worked in the computer industry for over 20 years I have a good general knowledge of computer technology. I have read over 100 investment books -- mostly the old ones. I spend my time doing investment research, attending annual shareholder meetings, and managing portfolios.
Experience Professional Engineer, MBA, over 20 years experience in computer industry, 9 years intensive investing experience.
Expert: Murray Cass Date: 4/17/2001 Subject: History of Technology
Question Hi,
I am an inexperienced investor, but fortunately my question has to do more with history. You seem to be interested in it as well. Can you please tell me/guide me to the best resources relating to the history of technology, specifically in 1981. Or if you know of (or remember!) what some of the specific issues/business pains were in 1981, you will be my personal hero.
Thank you so much in advance for your time.
Meghann
Answer Hi Meghann,
Listen Meghann my kids are really upset with me as I refuse to do exactly what they ask so I really need to be somebody's personal hero. I hope I don't blow this chance.
1981 was not that long ago you know (boy, do I sound old!). I was a computer programmer and had just started my software company. In general the North American economies were going thru a big recession, interest rates were sky-high (20% and some commentators were calling for 30%!), and everybody was as usual worrying about yesterday's problems (inflation, price of oil).
In technology the PC was being born. Minicomputers were very popular. They were giving mainframes a run for their money. Companies like Digital, HP, Honeywell, Burroughs, Sperry, and MAI were doing well with their minis. The PC industry was not taken seriously by business. It was dominated by Apple, Radio Shack, Atari, and Commodore. In August of 1981 IBM introduced the PC. It was not cheap (there was the IBM premium at the time as they still thought the name was special) running at about $4000. The big advances it offered were 80-column displays, a huge 256k RAM, and DOS 1.0 (which was a dog). Soon after IBM introduced a much more useful computer, the PC/XT, which added memory and a fixed disk (10mb).
The big apps were spreadsheet and wordprocessing. There was also some database (really glorified filing) and accounting. But the big (and I mean huge!) app was Visicalc the first electronic spreadsheet. This was before Lotus 1-2-3. Mitch Kapor copied and improved the spreadsheet when he came out with 1-2-3. Visicalc was his model.
Compaq was one of the first to jump in with a luggable computer with a tiny screen. Several others entered the clone market but mainly in desktops. Dell did not join in for many years to come.
Microsoft was a non-name software startup. Intel was also a relatively unimportant company partially owned by IBM. Motorola and Zilog were the big microprocessor companies.
Bill Gates had not yet made his first million. His coup with the IBM deal was a real surprise. The favourite was CPM by Gary something at Digital something. The big languages were BASIC, Pascal, and USC Berkley P-code. Lots followed like Smalltalk, Forth, and there were even some crummy C compilers.
Apple had the non-GUI Apple II+, followed by the useless Apple III and the failed Lisa which was Apple's first GUI computer and the MAC's predecessor.
Enough details. 1981 was very significant in that IBM's entry into the microcomputer world confirmed the PC as something businesses could use. (We even had a customer who waited until IBM's entry before doing a big LAN software project.)
Soon came the year of the LAN (Local Area Network). It lasted about a decade. :-) Seriously, the LAN was very slow to introduce as no company seemed to have their act together enough to sell the technology.
Over the years the PCs got more powerful as did the operating systems, and application software. LANs allowed the micros to compete with minis.
For a more general view of life then from an investing perspective have a look at the book, Investing in the Future, written by Kiril Sokoloff, Joseph Laird, and Thomas Mack. It was written in 1982 so their recollection in the book will be fresher than mine. Chapter 6 on Office Automation Hardware will give you their overview of technology changes they expected. Don't laugh; predictions are tough to make. Their general predictions about oil prices and inflation were right on.
What I find interesting is that at the time there was tremendous fear about investing in the markets. P/Es were very low compared with today. Yet looking back, 1982 was the beginning of the huge bull run that took us to 2000 (with a few blips in 87, 91, and 98). Chapter 2 was very interesting. The authors look at the best-seller investment books at major turning points in the markets. And they find that the time to get out is when the best-sellers are wildly optimistic. Remember Dow 36000 published in late 1999? So the lesson is to go against the crowd -- easier said than done.
For a broader view you should visit a reference library and read back-issues of business and tech magazines from that time.
