Thursday, August 18, 2011

Bullish on Life!

Anyone that really knows me well knows how bullish I am on life, and I will admit my optimism can sometimes come back and bite me.  It usually does every year before the Detroit Lions play their first game as I typically see them in the playoffs just about every year, except maybe the year they lost every game, even I could not get excited about that team.  That terrible season finally forced their organization to make the changes they needed to make, and it now actually looks like even the Detroit Lions are headed in the right direction.  There is always a silver lining somewhere right? 

Living in America, where so many fortunes have been made out of nothing,
 and we have seen such a huge jump in our standard of living in such a short period of time, how can anyone ever get really pessimistic about this great country we live in?  When I hear people talk about the end of American exceptionalism, it really bothers me.  It has obviously been a very difficult few years for most Americans, the economy has been in the dumps for longer than I thought that it would.  It is usually when we are at out lowest that we realize, just like the Detroit Lions did during that 0-16 season, that we need to make major changes and head in a new direction.  It is my belief that we are at that point here in America, and the changes that are made will lead to the next great economic expansion. 

The technological advances that have already happened and continue to expand have not only set us up for a major expansion here in the U.S., but also a worldwide expansion.  Businesses in the U.S have shored up their balance sheets, as have most Americans.  Corporate and individual debt has dropped dramatically.  Corporate profits are back up to levels before the 2008 crash, and they are now increasing their spending and driving growth after a decade of under-investing.  Consumer spending has rebounded as well, currently $450 billion above its pre-panic 2008 levels, and the S&P 500 has doubled from its lows of just 3 years ago. (See Economic Rapture, Brian Wesbury, First Trust) We are all reminded by the media on a daily basis of our economic problems, and I am not taking a blind eye to that.  As evidence by the stats above though, one has to admit that our economy is incredibly resilient, and those investors who focus on the positive, rather than the negative should be rewarded in the long run.