10 Reasons to Bet on America

  • Buffett and Gates still confident

    Last week, CNBC hosted an event at Columbia University called “Warren Buffett and Bill Gates: Keeping America Great.” The two business visionaries fielded questions from eager students — some trying a little too hard to please the billionaires in the room, but some with great questions. As you can probably guess from the Keeping America Great part of the forum’s title, Buffett and Gates still think America is a good long-term bet. Buffett’s Berkshire Hathaway Corp., as you probably heard, just made a huge bet on America, when he purchased Burlington Northern Santa Fe Corp., a giant railroad company, for $34 billion. Here we highlight some of their most optimistic claims.
    Capitalism works
  • Capitalism works

    Of course, Gates and Buffett have a bit of a vested interest in our current economic system of choice — capitalism — considering they are the richest two guys in the world and all. Beyond this, however, they have faith in the basic tenets of capitalism. As Gates explained during the forum, “capitalism has been massively successful, you know. Standard of life, medicine, all these great things have come out of it.” Photo Credit: Mike Fleming
    Innovation hasn’t disappeared
  • Innovation hasn’t disappeared

    Gates told the audience that even during the height of the financial collapse, fundamental innovation was still taking place in research labs and factories around the country. “I'll bet there are some inventions that took place in that fall in the darkest hour.  People were working on new drugs, new chips, new robots and things to make life better for everyone in the decades ahead,” he said. Check out MainStreet’s list of inventions created during recessions – chocolate chip cookies, anyone? He acknowledged that our “complex financial system” is a place where mistakes can occur, “but more fundamental than that is the innovation, the fact that you can create new companies, that people are willing to take risk and invest, that there’s great science going on. This country still has the best universities, the best science,” he told the crowd enthusiastically. Photo Credit: luca_volpi
    A great engine
  • A great engine

    I have to admit that even my cynical heart was warmed when Buffett eloquently answered the question of whether greed and corruption were behind the economic collapse. He acknowledged that greed played a part, but reminded the audience that greed isn’t something that got “invented in the last few years.” Pointing to the larger picture, Buffett explained that “we're never going to get rid of greed. We're never going to get rid of fear. What we do have is a system, as Bill said, a market system where we have the quality of opportunity and the rule of law combined to unleash human potential in this country over the last couple of hundred years to the degree nobody would have believed possible a few centuries before that. There's nothing that's gone wrong with that system. Our economy was sputtering and still is sputtering some. But we've got the greatest engine ever devised. And it's just beginning. Greed will continue. Don't worry about that.” Photo Credit: calliope
    A fortunate time to be young
  • A fortunate time to be young

    “I’d love to trade places with any of you,” Buffett told the crowd of business school students. Gates smiled, as if he were considering the mechanics of how that would work. Later in the event, Buffett joked — or maybe it was a serious offer — that he would offer any student there $100,000 in exchange for 10% of his or her total future earnings. In essence, he was valuing each of the business student’s worth at least $1 million. That’s how confident he is in the future of American business, and in the ingenuity of young American business executives. Photo Credit: Getty Images
    Self-correction is built in
  • Self-correction is built in

    Bill Gates reminded the audience that despite the recent ups and downs of the financial system, it does have “a lot of self-correction built into it” as long as there is good leadership. Things bounce back. Photo Credit: Getty Images
    Our success depends on others
  • Our success depends on others

    A rising tide lifts all boats, as the saying goes. Gates sees America’s future success as inextricably tied to the success of other nations: “The U.S. benefits as the globe benefits. You’re not going to have a case where the rest of the world does poorly and the U.S. does well. Our fate is tied to open trade, innovation everywhere.” Photo Credit: Getty Images
    A great time to get into the market
  • A great time to get into the market

    Although Buffett admitted he keeps “enough cash around” to feel comfortable and not lose sleep at night, he explained that “cash is a bad investment over time.” “And to sit around and try and pick the bottom, people were trying to do that last March and the bottom hadn't come in unemployment and the bottom hadn't come in business but the bottom had come in stocks. Don't pass up something that's attractive today because you think you will find something way more attractive tomorrow,” he told the audience. In other words, if you see a particular stock, fund, or company as attractively priced today, don’t sit on the sidelines simply because you fear it will be a slightly better value tomorrow. Better to get in the game at some point than not be in it at all. Photo Credit: criminalintent
    Reminder to stay true to oneself
  • Reminder to stay true to oneself

    Perhaps ironically, the world’s most successful investor urged his audience not to make life decisions simply for the money — not to follow the paycheck, in other words. “Do what you would do if you were in my position, where the money means nothing to you,” Buffett said. “Go to work at a job that turns you on.” He and Gates both believe that if you follow your true passion, the money will eventually come. Photo Credit: Getty Images
    Final vote of confidence
  • Final vote of confidence

    The CNBC host closed out the forum with this final question for Buffett and Gates: “If America was a stock, would you buy it?” “You bet,” Gates said. “On margin,” Buffett said, eliciting laughter from the biz school kids. You can read the complete transcript of the broadcast here. Photo Credit: Getty Images
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