Investment and Generations: Understanding the Silent Generation (1925-1945) and its Economic Impact

The Silent Generation was born between 1925 and 1945, between the Great Depression and World War II. According to Wikipedia,  She is known to work hard and not be demanding., hence the name. The "silent" are described as fatalistic, conventional, possessing a random moral sense, expecting the worst but remaining hopeful. If there is one famous investor who represents this generation, it is our dear friend Warren Buffett (1930): hardworking, conventional and discreet.

Warren is a billionaire, but he lives, eats, houses, clothes and travels (except for professional reasons) like almost everyone else. His investments are cushy, he chooses a few very good companies, invests for the long term and he beats all the young wolves who trade on stocks that are much more speculative. He saw the Internet bubble bursting even though everyone called him a "has-been".

The "silent" held the reins of society during the economic boom that followed the oil crises of the 1970s, including the mass arrival of the PC, the fall of the Berlin Wall, the first Gulf War and up to the Internet revolution. They therefore experienced a youth tainted by economic crisis and war, but their hard-working and conventional side laid the foundations for a relatively stable growth between 1980 and 2000.

Alan Greenspan (1926), chairman of the FED until 2006, is also a representative of the silent generation. Having lived a youth marked by the consequences of the crash of 1929, with the banking and economic crisis that followed, and up to the war, he became a master in the art of controlling theinflation and manage crises. Magic Greenspan has managed to avoid all disasters. Or almost. Many criticize him for his management of the Internet bubble which was the trigger, a few years later, of the subprime crisis. Doubtless wanting to regulate the markets as best as possible, and avoid a 1929 scenario, he in fact practiced a particularly expansive policy, with very low interest rates, before raising them significantly, always with the same concern of curbing inflation.

Nicolas Hayek (1928-2010) is also a symbol of this silent generation. He always declared that he wanted die at work, which he did on June 28, 2010, at the age of 82! The character is nevertheless less conventional than others of his generation, since he is the inventor of the famous Swatch which revolutionized the world of watchmaking and the Smart, which was originally intended to be an eco-friendly and inexpensive car.

Although the "silent ones" are now retired (or deceased), their imprint on our societies is still marked. We live on the foundations they laid, whether good or bad, such as theEuropean Union, the Euro, and all infrastructure in general. Some still sit on the boards of directors of large companies.

As retirees, on the other hand, they are generally quite discreet, which corresponds to their sociological type, but also to the fact that quite a few of them do not receive extraordinary pensions. Apart from their medical and pharmaceutical needs, we should therefore not count too much on this generation to support current and future economic growth.On the other hand, their qualities as workers and as people who are consensus-oriented and not very demanding would be very useful in the period of budgetary rigour that we are currently experiencing.

We will see that the situation is significantly different among the baby boomers.