It is interesting how one hour consists of 60 minutes and how one minute is made up of 60 seconds. Similarly, while it’s unusual that one year has approximately 365.2422 days (according to the Gregorian calendar we use), there is a logical explanation for this: it represents the number of Earth’s rotations around its own axis until it reaches the same position relative to the Sun. I will discuss the significance of the number 60 in my next writing. This is not a story about our origins; it is a story about time.

The universe is 13.8 billion years old, and I would like to write about it. However, the margins of this paper are too narrow for such a broad topic. Therefore, I must limit my focus to a shorter time frame. With the end of 2024 approaching quickly and having already wrapped up Intercapital’s Christmas party, it makes sense to reflect on this year. Yet, I will not do that. Instead, I will focus on the end of the first quarter of the century and begin my discussion from there.

In the first 12 years of this century, the S&P 500 finished nearly flat. However, in mid-2013, the index broke the highs set in 2000 and 2007, marking the beginning of a strong upward trend that has continued for more than a decade since. The last time the index remained so flat for an entire decade was in the 1970s, a period marked by high inflation, oil crises (such as the Yom Kippur War), and the end of the Bretton Woods agreement, which concluded the gold standard. Similarly, the first decade of this century was filled with significant upheavals. We entered the century (and millennium) facing challenges like the bursting of the Dot Com bubble. Just as we began to recover from that crisis, the Global Financial Crisis hit. We barely emerged from that turmoil when the European crisis followed.

The world did not end as predicted; instead, the 1980 release of the movie “The Empire Strikes Back” marked the beginning of a new era that lasted for 20 years, during which the S&P 500 index increased fifteenfold.

Source: Bloomberg

From 2013 to the present, the same index has grown approximately fourfold.

Source: Bloomberg

On the bond side, the story was more complicated, featuring fluctuations, periods of negative interest rates, and a harsh awakening with the onset of war in Europe, ushering in a new era of high inflation. Although inflation has returned close to the target of 2%, yields still remain elevated.

Source: Bloomberg

Let’s examine what fundamentally changed in the world over the past 25 years. On January 1, 2000, we did not have the iPhone, social networks, or WhatsApp. Instead, in September of that year, we had the Nokia 3310! We transferred information using floppy disks.

Significant changes have occurred in geopolitics due to the rapid growth of China’s economy. China’s share of global GDP rose from 3% in 2000 to 17% in 2024. In contrast, the United States’ share dropped from 29% to 26%, and the European Union’s share declined from 24% to 17%. When the Croatian National Bank sold its gold reserves in 2001, it triggered a rally in gold prices that continues to this day, with the price increasing more than tenfold. Gold is increasingly being accepted as a key asset for central banks, which has mainly contributed to the rise in gold prices in recent years.

Source: Bloomberg

At the beginning of this century, oil was priced around $25 per barrel and reached a peak of nearly $150 just before the global financial crisis in 2007. Since then, oil prices have remained relatively stagnant, fluctuating within three different ranges during three distinct periods.

That was a brief note about the beginning of this century, which concluded this year. Next week, I will discuss the developments of this year and their implications for the upcoming year.