When Warren Buffett speaks, I listen. As you know Mr. Buffett is one of the best prognosticators this country has ever produced. His stellar track record as an investment manager is a function of not only his genius but also his strong belief in the American economy. Thus I was not surprised to read in Berkshire Hathaway’s 2013 Annual Report Mr. Buffett’s statement,
Indeed, who has ever benefited during the past 237 years by betting against America? . . . the dynamism embedded in our market economy will continue to work its magic. America’s best days lie ahead.
It is not just Mr. Buffett who is optimistic about the future of the American economy. I recently examined this topic by analyzing data from my national surveys of high net worth/high income individuals. And as I suspected there is a significantly high correlation between net worth and one’s level of optimism concerning the economy. The proportion of optimistic versus pessimistic respondents who are in the high income, low net worth category [income statement affluent] is 1.4. In other words, for every 1 pessimist there are 1.4 optimists. For those in the $1M to under $2M net worth category, the ratio is 1.6; $2M-$5M, 2.3; $5M-$10M, 2.8, and $10M+, 3.9.
Does net worth account for optimism? Or does optimism account for net worth? What does the Bible say? “If you have faith as small as a mustard seed . . . . Nothing will be impossible for you.” Matthew 17:20.
Great post. I’ve been reading several books and articles focused on positive thinking. Why be negative when you know that can only lead to failure. At least if you try to be an optimist, you have the chance of succeeding, while pessimism basically only has one outcome. Love the bible verse as well.
When you got back and read the biographies of many of the Wall Street titans from a century ago, they pointed out that there are many mansions on Fifth Avenue owned by those bulls, but no mansions owned by bears.
We might all be a bit more optimistic if we had frequent, private audiences with the very secretive white house, and had hundreds of millions on tax dollars go to bail out our investments during the big downturn. That said, I hope he’s right, and that your choice to post this on April Fool’s Day wasn’t prophetic. 🙂