Why Buffett’s Advice About America Is Mostly Ignored — And Why That’s A Mistake…
Anyone interested in the markets knows that Berkshire Hathaway’s annual shareholder letters are mandatory reading. They’re always chock-full of wisdom, humor, humility, and golden nuggets of investment advice.
I’ve read my fair share of Warren Buffett’s shareholder letters over the years. But the 2020 shareholder letter really struck a chord with me. It seems that the Oracle of Omaha knows exactly what needs to be said and when.
But unfortunately, my favorite part of the letter wasn’t touched on by any of the mainstream media.
Longtime Buffett fans know that he has a strong belief in America and America’s ingenuity. And when we needed to hear it the most, he reminded us all just how great of a country we live in.
You see, in today’s society, between social media and the mainstream media, we’ve become addicted to outrage. Too many people take America — and the freedoms we enjoy — for granted.
Sure, this country isn’t perfect, and there is plenty of room for improvement. But if you want to become successful, it’s hard to argue that there’s a better place than the United States.
Unfortunately, that tone about America doesn’t really seem to resonate these days. Instead, it seems that it’s more popular — and garners more “clicks” — to bash our country. If you’re too patriotic, you’re automatically funneled into some political group and labeled an “extremist.”
In fact, I read somewhere that one brewery owner actually took down his American flag because of the stigma that it conjured, not wanting to lose potential customers over it. Unfortunately, this is just one small case among many.
The point is, it’s become unfashionable to talk about the things that make America great. The mainstream media certainly won’t talk about it when they cover Buffett’s shareholder letters — even though he dedicated two and a half pages to this very topic in the 2020 letter.
So today, I want to spend a little time fixing that. First, by touching on some of the things in the letter that stood out to me. Then, we’ll also take a moment to appreciate the incredible opportunity we as investors have to build wealth in this country.
Buffett: “Never Bet Against America”
“Today, many people forge similar miracles throughout the world, creating a spread of prosperity that benefits all of humanity. In its brief 232 years of existence, however, there has been no incubator for unleashing human potential like America. Despite some severe interruptions, our country’s economic progress has been breathtaking.” — Warren Buffett
In the letter, Buffett recounted several success stories that should make us all proud. Since our country’s birth, he wrote: “individuals with an idea, ambition and often just a pittance of capital have succeeded beyond their dreams by creating something new or by improving the customer’s experience with something old.”
Then he launched into the story about Mary See who set out to deliver an age-old product that she had reinvented with special recipes. After 100 years, her candy company, See’s Candy — owned by Berkshire Hathaway — continues to grow and remain a dominant force in the candy space.
Then there’s “Big Jim” Haslam who started what became Pilot Travel Centers in 1958 by purchasing a service station for $6,000.
Then there’s my personal favorite…
Rose Blumkin, who arrived in Seattle in 1915 as a Russian emigrant, unable to read or speak English. She eventually settled in Omaha, Nebraska. And after squirreling away $2,500 she decided to start a furniture store.
It was by no means an overnight success. Roughly 10 years into her endeavor the company’s net worth had grown to a meager $72,000. The cash she had both in the till and on deposit, was just $50. But she persevered, along with her son who had just come back from World War II. And by 1983, they’d built it into a $60 million company. That very same year, Berkshire purchased 80% of the company — Nebraska Furniture Mart.
Today, Nebraska Furniture owns the three largest home-furnishings stores in the United States, and set a sales record practically every year.
My favorite part of the story… when Mrs. Blumkin’s large family gathered around for holiday meals, she would ask that they sing a song before eating. Her selection never varied: Irving Berlin’s “God Bless America.”
Buffett finished up this section of his letter with this statement: “Our unwavering conclusion: Never bet against America.“
It’s A Great Time To Be An Investor In America
Not every human on this planet is so fortunate to have such a wealth-building machine at their fingertips as we do. Think about that for a moment.
Not only can we start or buy a business with relative ease in America, but we can enjoy the fruits and labor of other people’s success via the stock market. Many of us might take for granted that we can hop online, open a brokerage account with as little as $50 and begin investing alongside some of the greatest entrepreneurs on the planet.
There are millions of folks who don’t have access to this wealth-building marketplace.
Granted, investing in the stock market isn’t a sure thing. There will be ups and downs. Some investments will make us money while some will lose us money. Too many people want overnight success and become frustrated when they don’t hit a home run on their first pitch.
But with some patience, good judgement, and a little luck, we can enjoy some fantastic long-term returns. Just consider some of the stocks we own over at Capital Wealth Letter, my premium advisory service.
We’re up 166% on Visa (NYSE: V). Our investment in the candymaker Hershey is up close to 130%. We have two triple-digit winners in our portfolio by investing in one of Buffett’s personal favorite businesses: insurance. We’ve nearly doubled our money on Google parent Alphabet (Nasdaq: GOOGL) in a little over three years.
Here’s the thing… it didn’t take any kind of special genius to find these stocks. In fact, some of them are what I like to call “no brainer” picks. They’re accessible to everyone. And remember, we didn’t show up to work at any of these American companies. We didn’t have to log into a Zoom meeting or commute anywhere. We haven’t done anything. We simply made a few clicks on our computer screen and taken part in their success.
It’s truly remarkable when you think about it.
So, while there’s a choir of people who want to harp on America’s shortcomings, I’d rather heed the advice of a 91-year-old mogul whose mantra is “never bet against America.”
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Jimmy Butts and his team have been researching this phenomenon closely for months… Their findings are nothing short of “shocking” — and they’re saying now is the time to strike.