…if anything is likely to affect the trend rate of growth of the U.S. stock market over the next decade, it will be productivity growth, which leads inexorably to real economic growth. Since such growth has slowed over the last 15 years or so, this slowdown has not likely been the result of any particular U.S. President or Congress. From our perspective, productivity growth flourishes when innovators, entrepreneurs and motivated workers feel that if they are successful in creating quality goods and services, they will reap appropriate rewards. The existence of a skilled workforce—with skills well suited for today’s economy—is vital for economic growth. Our nation is currently lacking enough skilled workers, and fixing this problem won’t occur overnight. Importantly, there are hard working and skilled people throughout the world, and the U.S. has often attracted many such men and women, including my Italian grandfather, with the promise of opportunity. Personally, I’d rather have such people on my team than have to compete against them. The history of our country—which is the history of the marketplace being used to effectively and efficiently organize producers, consumers, entrepreneurs and workers in ways to promote national growth—is certainly encouraging. However, this story will need time and a supporting environment to flourish as it has in the past. Importantly, no country in history has succeeded in the area of economic growth more impressively than the U.S. As Warren Buffett says, “It has never paid to bet against America.”
Nov 2016