Democracy: The Safe Bet for the Growth of Money

When I was younger, I used to worry about all the social issues. But as the years have gone by, I have tended to vote for whatever candidate I think is going to help me get ahead and keep as much of my money to myself.

I have studied where to keep what I have accumulated now that I am retired. I’ve been guided by the words of the Oracle of Omaha, Warren Buffett:

“The American miracle, the American magic has always prevailed, and it will do so again.”

Thus, I have most of my assets in U.S. stocks.

Presently we enjoy the highest stock market valuations in the world. Our broad market P/E [price to earnings ratio] is just under 30. China’s is just under 13, and Russia is just under six.

This is because democracies are a better bet for the safety and growth of your money then autocracies.

Why would any person who has a substantial amount of wealth in the stock market vote for a candidate who has worked to consolidate unbalanced power in the executive branch and replace the ballast of the bureaucracy with zealous party loyalists ?

The challenges we face as a country are substantial, and large numbers of Americans are fed up with the status quo. It’s understandable that they are sick of it. But is it possible that the cure, giving the President more power, might be worse than the disease?

Making our country more like Russia or China seems to pose a severe risk to the entire U.S. stock market.

Having that kind of power must be great if you are the exalted leader or one of his favored few. Maybe some of these Silicon Valley Tech Bros are thinking that they will be one of the newly enriched oligarchs under our more powerful leader.

How much does a Russian oligarch actually have when he can’t even speak his mind without fear of flying out of a building? How much does a Chinese tech titan really have when he might end up in a reeducation camp if he’s not living right in accordance with what the leader deems appropriate that day?

It seems oligarchs vote their pocketbooks, too. The first priority if you’re part of the oligarchy that gets rich under an autocrat is to move your money out of that lousy country into one that has the rule of law. If we make the United States more like Russia or China, where will an oligarch move his money? Mars?

I consider myself rich just to live in the freedom of a functioning democracy. I will vote whatever candidate I think will preserve that democracy, and our stock market fundamentals.

Warren Buffett also said:

“In the short run, the market is a voting machine but in the long run, it is a weighing machine.”

In the short term, valuations may reflect popularity but in the long term they will reflect the true value and fundamentals of the enterprise.

Let us not underestimate how much democracy is worth. It’s about the valuations, stupid.