The #1 Reason Why Wall Street Outperforms

Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Time to Take Action: We’re getting 30-50 new sign-ups every day at FreedomFest. But be aware — on July 1, next Monday, our registration fee will increase by $100. Save $50 this week with code EAGLE50. Details below.

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The first major presidential debate between Joe Biden and Donald Trump will take place this evening, Thursday, June 27. I’ll have a special teleforum tomorrow, Friday, June 28, at 1 p.m. EST, to discuss the outcome of the debate and my outlook for stocks, bonds and commodities for the remainder of the year. Please plan on joining me. Here are the details. The teleconference will be on 6/28 at 1 p.m. EST, regarding “Is the Market Telling Us Who Will Win the Election?” The event is free to attend, but you must register here first. Don’t miss out!

We are planning our own Presidential Debate on Friday, July 12, at FreedomFest in Las Vegas, sponsored by the “Free and Equal” Foundation. Unlike CNN’s debate, ours will include third-party candidates and a live audience. See you there!

“America will become one of the greatest and most formidable that ever was in the world.” — Adam Smith, “The Wealth of Nations” (1776)

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America is the promised land when it comes to investing in the stock market. In the year 2002, three economists from the London Business School reviewed the performance of 16 country funds (Europe, North America and Japan) during the 20th century and came up with this chart:

They entitled their book “Triumph of the Optimists: 101 Years of Global Returns,” and came to two conclusions.

First, all 16 country funds (including stock markets in Europe and Asia) showed positive returns over the long run, despite the bear markets due to two world wars, the Great Depression and inflation. “Our study reveals that the risk-takers who optimistically invested in equities [the stock market] were the group who triumphed in the long run.”

And second, the U.S. stock market outperformed all the others by a substantial margin.

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U.S. Outperforms in the 21st Century Too

What about the stock markets in the 21st century? This chart shows the bull market continues, especially on Wall Street.

This is why all my recommended stocks and funds are based in the United States. I have no foreign investments in my newsletter,  Forecasts & Strategies, at the present time.

Why Has Wall Street Outperformed?

Historians point to a variety of reasons why the United States has been the promised land for investors: thanks to the U.S. Constitution, America is one gigantic “free trade” zone between 50 states; the United States enjoys a comparable advantage in natural resources and riverways from sea to shining sea; America is a melting pot that takes advantage of mixed races and cultures, and a generous immigration policy; and last but not least, the United States has adopted a long-time tradition of free-enterprise capitalism and a stable, democratically-elected government that restrains the excesses of state intervention in the economy.

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Lord Matt Ridley Discovers the Key Indicator

Recently, I’ve been reading a great book called “How Innovation Works,” by Lord Matt Ridley, considered the #1 public intellectual in the United Kingdom… and a keynote speaker at this year’s FreedomFest. I’ll be interviewing him in our opening ceremonies on Wednesday evening, July 10.

He makes the following startling observation:

“Of Europe’s 100 most valuable companies, none — not one — was formed in the past forty years. In Germany’s Dax 30 index, just two companies were founded after 1970; in France’s CAC 40 index, one; in Sweden’s top fifty, none at all. Europe has spawned not a single digital giant to challenge Google, Facebook or Amazon.”

Ridley’s point is that the European Union (EU) and its regulatory bodies have stifled competition and entrepreneurship and continue to do so. Rather than encourage new technologies, they prefer to sue and fine companies like Apple, Google and Facebook (Meta).

Meanwhile, the United States has embraced new technologies and innovation more than any other nation, what Harvard’s Clay Christensen has called “creative disruption.”

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In my economics classes at Chapman University, I ask my students, “Name the top innovative companies in the world?” They quickly respond: “Google, Amazon, Facebook, Microsoft, Apple, YouTube, Netflix and Tesla,” among others.

“What do they all have in common?” They are U.S.-based companies.

Note that several are run by immigrants, such as Microsoft’s Satya Nadella (India), Tesla’s Elon Musk (South Africa), Google’s Sundar Pichai (India) and Nvidia’s Jensen Huang (Taiwan). The United States still attracts top entrepreneurs from around the world.

What about the future of technology? Will the U.S. continue to lead the world, or does the future belong to China and India? Lord Ridley will answer this question at FreedomFest. Stay tuned.

AI vs AI Debate at FreedomFest

What about AI? The rapid pioneering of computer-generated (AI) and ChatGPT came out of overwhelmingly U.S.-based companies, universities and laboratories.

We are having several major sessions at this year’s FreedomFest on artificial intelligence (AI), or what might be better described as “Advanced Intelligence.”

I’m especially intrigued by one session scheduled for Thursday, July 11, in the afternoon: “Enlightenment or Enslavement? Two AIs Debate the Impact of Colonialism.” Richard Pockington (Emory University) pits Google’s Gemini against Anthropic’s Claude in this controversy. Fun session!

Bitcoin and cryptocurrencies are another exciting new technology primarily developed in the United States. We first discussed Bitcoin 10 years ago at FreedomFest. This year, we have several sessions on the future of cryptocurrencies and blockchain technology.

Frank Holmes, president of U.S. Funds, will speak on “HIVE Digital Technologies Pioneering Role in Crypto Mining and the AI Revolution.”

Alex Green, chief investment strategies at the Oxford Club, will reveal his “Magnificent Seven of the New AI Revolution” at FreedomFest.

On Friday, July 12, we will have a big debate, “Will this Bitcoin Bubble Ever Burst?” John Mackey and Alex Green say “Yes,” while Joel Bomgar and Chris Hunter say “No.” Moderated by Grover Norquist. Can’t wait!

I’ve now posted my entire schedule at FreedomFest here: My Schedule at FreedomFest 2024 – MSKOUSEN.COM

You can see why I’m excited about this year’s Renaissance gathering in Vegas, and so are others.

FreedomFest Update: Take Action Now

Excitement is building for next month’s FreedomFest. We’re getting 30-50 new sign-ups every day. We expect over 2,000 attendees on July 10-13 at the new Caesars Forum Convention Center, as well as over 200 speakers and exhibitors. Check out the full agenda here: https://www.freedomfest.com/agenda/.

You can see why our staff has put in thousands of hours putting this program together. When you see the full list of speakers, topics and events, you can sense the excitement.

Roberto Salinas says, “This is the best and most powerful line-up I’ve ever seen!”

They include Harvard Professor Steven Pinker, considered the #1 public intellectual in the United States… Michael Shellenberger and Michael Shermer on the new film, “Climate, the Movie” (part of the Anthem film festival)… Kennedy and Emily Campagno from Fox News… actors Ice-T and Rob Schneider… European economists Barbara Kolm and Rainer ZitelmannRobert Kiyosaki, author of the world’s #1 financial bestseller, “Rich Dad, Poor Dad”… Congressmen Thomas Massie and Justin Amash (who is running for Senate in Michigan)… TV personality Wayne Allyn Root… and Steve Forbes on the rise of inflation…

I look forward to interviewing Lord Matt Ridley on the Opening Ceremonies Wednesday night… As well as meeting Nevada Governor Joe Lombardo

We’ve also added an exciting new speaker, Yale Professor of Medicine, Dr. Sam Wilkinson, who will be speaking on Saturday, July 13, about his new book, “Purpose,” that gives a unique perspective on evolutionary theory. Not to be missed.

And in between, we have over 200 sessions on everything from philosophy, history, science and technology to geo-politics and finance… the Anthem Film Festival… our own Global Financial Summit… and much more.

Registration Fee Goes Up $100 Next Monday, July 1

Our registration fee will go up by $100 by next Monday, July 1, so I urge you to sign up now. Use code EAGLE50 to get $50 off the current registration fee. Register at https://freedomfest.swoogo.com/vegas2024, or call Hayley at 1-855-850-3733, ext. 201 or email her at hayley@freedomfest.com.

Our special hotel room block also ends this week, so take advantage now by going to https://www.freedomfest.com/hotels/.

How to Maximize Your Profits on Wall Street

I’m convinced that the best way to achieve financial independence is by investing in U.S.-based stocks and funds.

Sir John Templeton warns, “Avoid investing in those countries with a high level of socialist or government regulation of business. Business growth depends on a strong free-enterprise system.” (“Maxims of Wall Street,” p. 148).

The best strategies to maximize profits and minimize risks can be found in my book “The Maxims of Wall Street.” As Alex Green says, “The Maxims is a crash course in financial freedom.”

And Dennis Gartman notes, “It’s amazing the depth of wisdom one can find in just one or two lines from your book. I have it on my desk and refer to it daily.”

Sound Advice on Wall Street

Here are some samples under “Market Timing” and “Bargain Hunting”:

“The difference between a rich investor and a poor investor is the quality — and timeliness — of his information.” — Bernard Baruch (p. 30).

“Even the best company with the best prospects should be bought at a reasonable price.” — Dick Davis (p. 33).

“The smart investor must know the difference between what is temporarily undervalued and what is permanently undervalued.” — Sir John Templeton (p. 33).

“Nothing can make the spirit fly higher than finding a bargain when you’re the buyer. And nothing can make the spirit sink deeper than finding it later a whole lot cheaper!” — Wendell Brock (p. 34).

“Businessmen can profit handsomely if they will disregard the pessimistic auguries of self-appointed prophets of doom.” — J. Paul Getty (p. 110).

All the CEOs and founders of the most successful new companies in the United States are all optimists! To buy stocks, you have to be an optimist.

A Young Widow’s Lazy Way to Riches

Or how about this story told on p. 182:

“A young widow inherited a lot of securities from her deceased husband. Not knowing anything about finance, she took a very simple approach to this new found wealth. She kept only those stocks which continued to send her regular dividend checks and sold any stocks which omitted dividends, or which didn’t pay any dividends at all. Over the years, her wealth increased dramatically, and she died a wealthy woman.”

“Dividends are the critical factor giving the edge to most winning stocks in the long run.” — Jeremy Siegel (p. 183).

How to Buy ‘The Maxims’ at a Super Discount

“The Maxims of Wall Street” is now in its 10th edition, having sold nearly 50,000 copies. Why? Because every story and quote in the “Maxims” is “a lesson in finance,” to quote Kim Githler, president of the MoneyShows.

To get your copy at a discount ($21), go to www.skousenbooks.com. Additional copies are only $11 each. An entire box (32 copies) costs only $327. They make the perfect gift to students, clients and friends. I autograph each copy and mail them at no extra charge if inside the United States.

P.S. If you like stocks trading for $10 or less, make sure you keep an eye on your inbox this coming Monday at 12 p.m. EST for an exciting announcement!

You Blew IT!

Drinking a Glass of Wine May Not Be Good for You

In my chapter on Irving Fisher in “The Making of Modern Economics,” I noted that Fisher was a health nut who avoided smoking cigarettes, drinking alcoholic beverages (including wine) and consuming coffee or tea. Mormons also avoid all four products as part of their “Word of Wisdom.”

What does modern medicine say today about these four substances? It’s a mixed bag. Studies show that tea and coffee are actually beneficial to one’s health if used moderately and without too much sugar and cream.

Tea may boost your immune system, fight off inflammation and even ward off cancer and heart disease.

Early studies reported health problems with coffee, but new studies suggest that moderate coffee drinking reduces the chances of type 2 diabetes, heart disease, cancer and Parkinson’s disease.

The oldest studies show that smoking tobacco products are extremely bad for your health, and are linked to cancer, bronchitis, heart problems and other diseases that shorten your life.

But the biggest surprise is recent reports that drinking of alcoholic beverages, even in small amounts, is deleterious to your health. For years, we were told to avoid drinking too much, but that a daily glass of wine at the end of the day is good for you. “Drink in moderation” was okay.

No longer.

This week, the New York Times reported the following: “Last year, a major meta-analysis that re-examined 107 studies over 40 years came to the conclusion that no amount of alcohol improves your health; and in 2022, a well-designed study found that consuming even a small amount brought some risk to heart health. That same year, Nature published research stating that consuming as little as one or two drinks a day (even less for women) was associated with shrinkage of the brain — a phenomenon normally associated with aging.”

The market is responding with more non-alcoholic beers and wines. It’s an exciting new trend for those of us who are non-drinkers.

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