Frank Holmes Blog | The U.K. Just Said No To EU Socialism. Will U.S. Voters Do The Same In 2020? | Talkmarkets
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Frank Holmes is the CEO and chief investment officer of U.S. Global Investors. Mr. Holmes purchased a controlling interest in U.S. Global Investors in 1989 and became the firm’s chief investment officer in 1999. In 2006, Mr. Holmes was selected mining fund manager of the year by ... more

The U.K. Just Said No To EU Socialism. Will U.S. Voters Do The Same In 2020?

Date: Monday, December 23, 2019 6:34 PM EDT

Let’s begin with a thought experiment.

Imagine you wake up tomorrow from a three and a half-year coma. Everything that’s happened in the meantime—the election of Donald Trump, impeachment, Brexit and more—is a complete mystery to you.

Now imagine that I try to catch you up on what you’ve missed, but instead of handing you a stack of newspapers and magazines with manic headlines, or logging you on to Trump’s Twitter feed, I show you only the data: leading economic indicators, sentiment indices, stock averages. (The U.S. manufacturing purchasing manager’s index (PMI) is the one exception, which I’ll get to in a second.)

I show you the unemployment rate in the U.S. and the U.K., both of which are at decades-long lows. And Britain’s employment rate, at 76.2 percent as of October, is the highest ever.

(Click on image to enlarge)

I show you the phenomenal returns for each of the three U.S. stock indices. The historic bull market is alive and kicking, you learn. And with a handful of trading days left in 2019, there’s plenty of room for this year to be the best of the more than 10-year bull run, beating even 2013, when the S&P 500 surged 32 percent.

Even if 2019 ended today, it would still end up as the 10th or 11th best year for the stock market going back to 1970.

(Click on image to enlarge)

After taking all of this in, you may very well believe, at the worst, that things are just “fine” right now.

At best, you may think they couldn’t get any better. In some respects, you would be right.

And yet there’s an alarming number of people right now—having been exposed to the breathless, apoplectic headlines over the past few years, and wrung their hands at every crass thing the president has said—who are absolutely convinced that the sky is falling.

To illustrate, a recent Financial Times survey of approximately 1,000 Americans found that a shocking 42 percent believe the stock market is at “about the same” levels as at the beginning of the year. An incredible 18 percent think it’s actually decreased. About two-thirds of respondents say their personal finances have not improved since Trump’s election, even though the market is up roughly 55 percent since then, and average hourly wages have increased more than 9 percent.

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Caitlin Snow 3 months ago Member's comment

I'm one of the 'alarming number' of people who has stagnated economically in the middle class for years. I have not had a raise in five years. My employer doesn't provide benefits. I am executive level, with staff that is similarly undervalued. You one-percenters need to stop only talking to each other.