The American Tailwind

In Warren Buffett’s latest letter to Berkshire shareholders, he devotes the last section to an idea that he calls The American Tailwind. It’s the idea that Americans are resilient and innovative, and no matter what obstacles we face, we always come through on the other side—better and stronger than before.

This positive message stands out in an era dominated by sensational headlines and alarmist stories, so it’s worth weighing the words of a man with such wisdom. Buffett writes:

“Our country’s almost unbelievable prosperity has been gained in a bipartisan manner. Since 1942, we have had seven Republican presidents and seven Democrats. In the years they served, the country contended at various times with a long period of viral inflation, a 21% prime rate, several controversial and costly wars, the resignation of a president, a pervasive collapse in home values, a paralyzing financial panic, and a host of other problems. All engendered scary headlines; all are now history.”

In other words, every time you’re in the middle of a struggle, it seems like it’s the worst thing that’s ever happened. But invariably, American life goes on—and so does our economy. Certainly, there will be “breaking” news that upsets the markets, creating short-term pullbacks, routs, corrections, and recessions, but ultimately investing in American business is a solid bet.

Buffett ends his letter by saying that in the long term, “The major source of our gains will almost certainly be provided by The American Tailwind. We are lucky—gloriously lucky—to have that force at our back.”

Josh Norris is an Investment Advisory Representative of LeFleur Financial. Josh can be reached at josh@LeFleurFinancial.com.