Kass: More Than Ever, Buy American
Written by: Doug Kass
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is more secure politically and from a defense standpoint than most other regions of the world. Our democracy, despite all its inadequacies, has resulted in civil discourse, relatively balanced legislation, smooth regime changes and law that contributed to social stability and a sense of overall order.
The U.S. has a solid and transparent corporate reporting system. Our regulatory and reporting standards are among the strongest in the world. Compare, for example, the opaque reporting and absence of regulatory oversight in China vs. the U.S. (It is beyond compare.)
The U.S. is rich in resources.
The U.S. has a functioning and forward-looking central bank that is aggressive in policy (when necessary!) and capable of acting during crisis.
The U.S. dollar is (still) the world's reserve currency and is far more solid than the euro.
The U.S. is a magnet for immigrants seeking a better life. This and other factors have contributed to a better demographic profile in our country that has led to consistent population growth and formation of households. (Demographic trends in the U.S. are particularly more favorable for growth than those population trends in the Far East.)
In summary, conditions that have evolved over the near- and intermediate-term have conspired to favor risk assets in the U.S. over many other areas of the world.
In the period ahead, look inward (not outward), as I expect a powerful reallocation trade out of non-U.S. equities and into U.S. equities.
Buy American. I am.