How do you explain US exceptionalism over the last 75 years?

[newwurldmn]

Good industrial policy (invest in new technologies), pro-immigration (soak up talent), and a strong labor pool (educated and healthy). As long as we stay competitive in those areas, there’s no reason why we can’t continue being the global leader. Other countries are too ethnonationalist or are too small (Canada, Australia, New Zealand) to reach critical scale. UK was well positioned within EU but probably made one of the biggest self-owns (Brexit) in modern history.

Ask yourself — if you’re a start up in a new technology, where are you going for funding? If you’re a smart person from developing Asia or Africa, or even a smart entrepreneurial person from Europe, where are you going to go to build a career or company? If you’re a smart kid from Ohio or Texas and want to work on incredible and grand projects or businesses, where do you go?

The answers still lean heavily to the US.

Did I tell you about the time I spoke at Yale school of management?

the question was posed by a CT legislature official and the answer to that question was actually China and India.

 

[Specterx]

Equity market returns are a function of cash generation and asset supply/demand. Multiple changes dominate cash generation over short time frames, and the US equity market is much more expensive than most foreign ones because more money wants exposure to it.

Perhaps that will change, but what’s the alternative? Small and sclerotic EU or Japanese markets? China, where US sanctions or arbitrary, opaque CCP decisions can obliterate your entire capital overnight? Mountains of cash are being printed every month, and it will most likely end up the same places it has for the past decade.

 

[newwurldmn]

Equity market returns are a function of cash generation and asset supply/demand. Multiple changes dominate cash generation over short time frames, and the US equity market is much more expensive than most foreign ones because more money wants exposure to it.

Perhaps that will change, but what’s the alternative? Small and sclerotic EU or Japanese markets? China, where US sanctions or arbitrary, opaque CCP decisions can obliterate your entire capital overnight? Mountains of cash are being printed every month, and it will most likely end up the same places it has for the past decade.

Also US has strict and transparent accounting rules.

 

[longandshort]

Actually, the brain drain to the US slowed markedly in the last 10 years, partly because the US started to make it more difficult to obtain a visa, because of the real and perceived safety concerns in the US and because countries like India and China started investing heavily in STEM. A noteworthy number of Chinese and Indians who had been in the US for a couple decades returned to their countries to start businesses there.

This is true but there’s a big difference between being a local vs global favorite. The US is firmly a global favorite, and immigration policy ebbs and flows with the political climate. Even with that the US has a much better immigration policy than the vast majority of the world.

 

[Pekelo]

1. The S&P didn't exist in the 1800s. It started in 1928.

2. If you are asking why it is always seems to go up, because the ingredients are always replaced by newer, better performing companies. Also, the tide (inflation) raises every boat in the port.

 

[newwurldmn]

S&P didn't exist in the 1800s. It started in 1928.

this isn't true. The SPX index was founded in the 1950s. The dow industrial was created before the great depression.

During the GFC, data providers backdated the SPX through 1928 so that people could analyze how the markets changed through that period.

 

[Pekelo]

this isn't true. The SPX index was founded in the 1950s. The dow industrial was created before the great depression.

During the GFC, data providers backdated the SPX through 1928 so that people could analyze how the markets changed through that period.

Actually:

"In 1923, Standard Statistics Company (founded in 1906 as the Standard Statistics Bureau) began rating mortgage bonds and developed its first stock market index consisting of the stocks of 233 U.S. companies, computed weekly.

In 1926, it developed a 90-stock index, computed daily"

But anyway, even if you were right, my point still stands, there was no S&P before the late 1920s.

 

[TheDawn]

Actually, the brain drain to the US slowed markedly in the last 10 years, partly because the US started to make it more difficult to obtain a visa, because of the real and perceived safety concerns in the US and because countries like India and China started investing heavily in STEM. A noteworthy number of Chinese and Indians who had been in the US for a couple decades returned to their countries to start businesses there.

WHY didn't the US cultivate its own "brains"? WHY didn't the US invest heavily in STEM? WHY didn't the US invest heavily in education instead of sports and entertainment? That is the problem.

 

[SunTrader]

Standard (started in 1906) and Poors (started in 1860) didn't exist as a single merged company until 1941.

S&P 500 started in 1957.

 

[Pekelo]

S&P 500 started in 1957.

Interestingly and regardless my point still stands.

So why are we looking at a chart that goes back 70+ years longer?