ep 379 | Is America just built different?
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What is the main topic discussed in this episode?
On Point with Craig's Investment Partners. The information provided here is general in nature and it's not financial advice. It doesn't take into account your situation, objectives, goals or risk tolerance. All investments are subject to risks and none are guaranteed. Before you make any investment decisions, we recommend you contact an investment advisor. For more information about our services or to view the Craig's Investment Partners Financial Advice Provider Disclosure Statement, please visit our website which is craigsip.com. Welcome to On Point. I'm Mark Lister, Investment Director at Craig's Investment Partners, and I'll be talking about a range of topics including economics, portfolio strategy, investor education, and anything else that's happening out there in financial markets.
Why compare Brexit’s 10th anniversary with America’s 250th for investors?
G'day to I hope you're all well. Today I want to talk about two significant anniversaries that we've seen over the last few weeks. The first one was the 10th anniversary of the Brexit referendum, while the other was the 250th anniversary of America's Declaration of Independence. So the first one of those obviously commemorates Britain's decision to leave the European Union, the EU, while the other celebrates the birth of the United States as we know it. Now these two might have little in common at first glance, but together they raise a really interesting question for investors. Why is one country spent the last decade debating whether it actually made the wrong call and made itself weaker? And seven prime ministers, I think, in 10 years tells you just how challenging it's been for the UK, while the other nation continues to dominate the global economy despite repeated predictions of its decline over many, many, many decades.
It's also a reminder of one of Warren Buffett's most famous observations that has proved to be remarkably good advice. Never bet against America. Now, the US economy hasn't had an easy ride over the last 100 years. It's endured the Great Depression, the turmoil of the 1970s, the dot-com bubble and crash, the global financial crisis, which is obviously driven by a housing crisis over there, and then the COVID-19 pandemic. More recently, it has been grappling with growing political polarization, rising government debt, and intense strategic competition from China. However, it has consistently emerged stronger than many expect.
What historical US challenges have tested its economic resilience?
The innovation of Silicon Valley and the recent dominance of the Magnificent Seven spring to mind, but America's success runs much deeper than its technology sector. Some of its advantages are geographic, with the US possessing abundant farmland, natural resources, energy, It's also bordered by two oceans. It's got relatively friendly neighbours. And the Mississippi River system, that has created the world's greatest inland waterway. So long before you had highways and railroads, farmers and manufacturers, they could move goods very cheaply across much of the country. And that's helped create a vast international integrated domestic economy. Don't underestimate how important that's been. America also has more natural deep water ports than any other major economy.
It's not just geographics, its financial advantages are just as formidable. It's home to the world's deepest capital markets and the world's reserve currency, the US dollar. Entrepreneurs in the US have access to funding on a scale that few others can match, while failure is often viewed as a necessary learning experience rather than something to be avoided. That's really important.
Which geographic features give the United States a long-term advantage?
Americans just have a different attitude. They're willing to take risks. And they're willing to support other risk takers. You wouldn't have ever seen a SpaceX or a company like that come out of anywhere else in the world. America is really unique in the way it supports and is happy to take risks and provide capital to those sorts of deep thinkers and entrepreneurs. America attracts talented migrants from everywhere else across the world, and its leading universities have helped commercialise new technologies much faster than other nations.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:00–0:47
2
Why compare Brexit’s 10th anniversary with America’s 250th for investors?
0:47–2:26
3
What historical US challenges have tested its economic resilience?
2:26–3:36
4
Which geographic features give the United States a long-term advantage?
3:36–5:18
5
How do US financial markets and culture support entrepreneurship?
5:18–6:15
6
What current risks could threaten America's economic dominance?
6:15–6:57
7
What evidence shows the US has repeatedly reinvented itself?
6:57–7:23
Speakers
1 identifiedMore from On Point
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