Plenty of publications cover investments and the financial news. However, have you noticed that pretty much all of them have one thing in common: an appreciation for the free market? Certainly, most of them aren't as appreciative as Casey Research, but there really are no far-left financial sites out there. In a way, it's a bit strange, given people's political views. After all, one could make a financial website or newsletter dedicated to companies tied to governments such the state oil companies, firms funded almost solely by subsidies, and government contractors. What could we call the newsletter... perhaps Casey Marxist Investor. For some reason, I don't think that it would be a big hit. When it comes to politics, people are extremely split on their economic views, but in the investment world, everyone is much closer to being on the same page.
Sure, in the short term, there are intense debates on what's best for the market. Some analysts feel QE3 or another short-term stimulus is just what the economy needs. However, almost no one disagrees on the big-picture items.
For example, think about China. Have you ever heard anyone say, "China keeps making itself more and more open to markets. That's a bad thing. You should short Chinese stocks." I've never heard that anywhere. Or what about, "Europe has a lot more regulation than US, so it's a better investment." Can't say that I've heard that either. Or what about, "Greece and Spain are less fiscally responsible. They love providing their citizens with all sorts of limitless government programs. As a result, they will be amazing investments for the future." Sure, there's a case for investing in Europe, but greater regulations and unsustainable spending aren't part of the investment thesis.
But there's more to it than that. What about stocks with government ownership? Does the government's share of AIG make you more or less likely to invest? Has anyone ever said, "Wow, now that the government owns AIG, this firm is just going to be amazing!" Or what about Dodd-Frank or other regulations? Has anyone argued that Dodd-Frank is going to make things so much better in the financial sector that it's clearly a case for investing in the financials? Quite the opposite. It's feared to destroy the sector.
On the big-picture items, investors are generally on the same page for the long term, if not the short term. They get it: free markets are good for economic growth. Even the people who push for more stimulus and more printing by the Fed understand that there's a certain point where one has spent too much or printed too much. However, what's widely understood in the financial world somehow never transcends to the realm of politics. Politicians still pretend that increasing regulation, greater taxes, and large government expenditures will somehow lead to prosperity. If investors realize that these things don't lead to greater prosperity, isn't it about time for everyone else to get the hint?
Source: Casey Research
