Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.  – Ferris Bueller via IMDB

Time is a funny thing. On one hand five years seems like an eternity. On the other hand it can go by in the blink of an eye. One need only ask a parent (or blogger)* about that one.

Five years ago the financial crisis, that still so dominates finance, politics and the economy, was still in its infancy. The true kick-off of the financial crisis, the failure of Bear Stearns wouldn’t begin until March 2008. For better or worse we will continue to live with and debate the consequences of those events for years to come.

However in another realm, that of consumer technology things have come a long way. Five years ago the Apple ($AAPL) iPhone was introduced to much acclaim. In contrast with many other product introductions the iPhone actually lived up to its hype and more. Thomas Hazlett writing at the WSJ notes:

The iPhone is not only the world’s single most popular smartphone, it is insanely lucrative. Apple sells just 9% of the cellphones out there (smart or otherwise) but accounts for 73% of industry profits. Meanwhile, the tablet—a new industry invented by Apple in 2010—features a 68% share for the iPad. Since June 2007, Apple has increased an astounding $422 billion in market cap; Google shares, by about $13 billion.

Henry Blodget at SAI talks about just how “radically successful” the iPhone has been. He notes the destruction it has wrought on the industry:

The iPhone has destroyed at least three huge companies in the past 5 years, and has deeply wounded others. Thanks to the iPhone, Palm is toast. Research in Motion is toast. Nokia is toast. Microsoft is reeling. Formerly dominant global hardware makers like HP and Dell are reeling. The whole PC-industrial complex is reeling.

The creative destruction that the iPhone represents seems to be a permanent fixture in our economy. Business models once immune from competition can be made obsolete in the blink of an eye. While exciting for consumers it also makes investing that much more challenging for public and private investors alike.

If nothing else the introduction of the iPhone should reinforce the value of studying history: economic, financial and technological. Some argue that the financial crisis was in part a failure to imagination. An inability to see how the housing boom and the accompanying bubble in “financial innovation” could eventually go so wrong. Which is true.

On the flip side things can, as in the case of the iPhone, go right as well.  While at present we are all focusing on the downside of the collapse of Europe, high unemployment in the US and too big to fail banks good things are happening as well. As Meb Faber at World Beta calls it the paradox of macro pessimism and micro optimism. Who knows whether there is another iPhone or Facebook getting launched today but it does not hurt to take some time contemplating that possibility.

*Just for fun check out what the linkfest looked like five years ago.

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