Broker Check

Some Lessons Go Unlearned . . .

November 01, 2023

Sometimes, I'm amazed at how a lesson can be taught so many times yet still needs to be learned. Investors have a knack for doing that. 

Why is that? Why do investors have such a hard time learning from the lessons of the past? Is it because of the financial media, their own cognitive biases, or is being pessimistic easier than being optimistic?  

I wish I knew the answer. 

One of the greatest lessons that STILL eludes investors and which I fear will never be learned is to stop betting against America. It just doesn't work.  

Betting against America has NEVER worked, no matter the time passed or the political climate, despite geopolitics, despite societal changes, despite all of our problems as a country and an economy. It has never worked to bet against America. 

Take a look at what was happening in 1973, according to Paul Fairie, who does threads using old newspaper clippings that demonstrate how the stuff we worry about today is the same stuff we worried about decades ago. 

You can find hundreds of examples, but here are just a few from Mr. Fairie:


How about going back further:



Do I still need to go farther back for you? How about 1917? 


I'm sure by now you've got the idea. 

At what point does everyone realize that jumping on the “America is dead" bandwagon doesn't bode well for those who jump on it?  

It’s been a part of the financial media playbook since the beginning of time – the dollar is dead, equities are dead, America is dead, blah, blah, blah, yada, yada, yada. 

You get the picture. 

And yet, here we are, where America STILL accounts for 60% of the global economy and where the dollar continues to be the world’s reserve currency.

Does this look like the dollar is collapsing? Wasn't the world order supposed to change after the 2008-2009 Great Recession, when the U.S. economy was brought to its knees and was on the brink of collapse?  

It turns out the answer is "No." 

The American consumer, which makes up about 70% of the economy, is still in an enviable position where wages CONTINUE to outpace inflation:

As you can see, U.S. workers (so far) have been able to keep up with inflation. 

Yes, elevated inflation is a problem in the U.S.; however, it's not unique to us. It's a worldwide problem, and yet the U.S. currently has the lowest inflation in the G7:

In other words, the U.S. economy has experienced higher growth and lower inflation than the rest of the developed world. 

It's not exactly the scenario that one would want to exist when regurgitating the "end of America” narrative.  

It just doesn’t work to bet against America. 

Even the amount of money that American families have looks better today than EVER going back to 1989.

Bloomberg tells us that we have just had the largest three-year jump in wealth in this country, and it was more than double the next-largest increase on record. 

Think about that for one second. How can you, in good conscience, knowing that we've had the largest three-year increase in wealth in this country, bet against America? 

I am, by no means, in this little diatribe belittling the problems that we face. We face many, and some are rather large – but when was the last time in history we didn't have problems? When has it ever been a utopian existence for Americans? 

You're right, NEVER! From the moment we set foot on this great continent, we had problems and had to overcome much bigger obstacles than we face today. 

And yet, we not only survived but thrived.  

While I don't expect to know how this will all play out, I choose to learn the lesson that it's always been a losing trade to bet against America, and I don't see that changing anytime soon. 

Stay the course, my friends.