Since 2000, we have experienced.
- The implosion of the internet bubble (Internet 1.0), with a market drawn down of almost 50%.
- 9/11, and the subsequent longest war the US has been involved in.
- A major financial meltdown, with a market drawdown of over 50%.
- A global pandemic, with a forced economic shutdown.
- 3 recessions.
- Political polarization and turmoil.
- The highest level of inflation in over 40 years, followed by the fastest interest rate hike ever by the Fed.
In spite all these challenges, here are the facts:
- The United States GDP grew from $10 trillion to over $26 trillion (red chart).
- The value of the largest US companies grew from a little over $12 trillion to over $34 trillion (purple chart).
- These same companies grew their quarterly earnings from $13/share to over $39/share (blue chart).
How is this possible?
The American people by and large wake up every day and want to improve their lives and improve the lives of their family. While far from perfect, our social structure allows almost anyone to pursue these dreams. Our unique time and place in the world is an incredible driver for opportunity, innovation, and growth…both individually and collectively.
Charlie Munger recently said, “Never under-estimate a person who overestimates themselves.” I would argue, this idea can be more generalized to the overall United States and its people. We have achieved more than what any other country could have imagined 247 years ago when our fledgling country fought for its independence.
As Warren Buffett famously said during the financial crisis, “Never Bet Against America.”
-Paul R. Rossi, CFA