COLUMN - The difference between the factory worker in the UK and the factory worker in the US is that when the UK factory worker watches his boss drive home in a Porsche, he mutters, "One day I'll put a bullet in his head." In contrast, the US factory worker says, "One day that will be me driving my Porsche out of my factory."
Howard Marks (legendary US investor)
I heard Marks say that in a podcast a few years back. It echoes Warren Buffett many times over regarding the American working spirit.
In his 2021 annual newsletter to Berkshire shareholders, Buffett writes:
"In its brief 232 years of existence... there has been no incubator for unleashing human potential like America… Despite some severe interruptions, our country's economic progress has been breathtaking. Our unwavering conclusion: Never bet against America."
Have a look at the Berkshire share portfolio. All US companies. Good to see his money where his mouth is.
Looking at the frontrunners for next year's US election got me thinking about what Marks and Buffett say about America.
Trump is by far the dominant Republican frontrunner, and Biden will likely be the Democratic nominee. If either one is elected, it would mean that by the end of their next term, Biden would be 84, and Trump would be 81.
This is in stark contrast to Europe.
In the US, we have two octogenarians fighting it out for one of the world's toughest jobs.
Meanwhile, in France, President Emmanuel Macron's recent decision to increase the retirement age from 62 to 64 led some of the largest and most intense protests the country has seen in years. The French are not happy about being forced to work an extra two years to age 64 before retirement.
It brings me back to Howard Marks' example of the factory workers and the spirit of the US workforce.
Is it surprising that Warren Buffett only invests in the US?
The chart below shows the EUROSTOXX 600 since 2006.
Chart: Eurostoxx 600 (600 largest companies in Europe)
Today, it’s barely above the peak reached in 2007. Commentators note that markets in Europe have been cheap for a while now.
Perhaps there’s a reason they’re cheap?
The chart below shows the S&P 500 over the same period.
Chart: S&P 500 (largest 500 companies in America)
You’ve made your money MANY times over since 2006.
Now, where would you put your money – Europe or the US? We know where Buffett has his…
Matthew Matthee has a wealth management business that specialises in retirement planning and investments. He writes about financial markets, investments, and investor psychology. He holds a Masters Degree in Economics from Stellenbosch University and a Post Graduate Diploma in Financial Planning from UFS. MatthewM@gravitonwm.com
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