Market breaks 20,000

[Kirkland Laing]

Let criminals out. Let illegals in. Let boys in the girls bathrooms. Condemn police officers. Persecute Christians. Don't care about the veterans. Pervert the children. Stomp on and burn the American flag. Accept barbarity in the name of Islam. Overtax the hard working people. Coddle the lazy. That's the liberal way.

OK then, by any single metric you can name of measuring stock values, US stocks are earning three to five times as much as similar earning Russian stocks. Why is that? You can't answer, can you?

Russia has an economy the size of Italy

How about Russian multinationals like Gazprom then who produce and pump gas and oil all over the world? The size of the economy isn't even relevant for domestic firms. I'm comparing earnings per share. Or at least future projected earnings per share which is what stock prices are based on.

The reason there's such a difference is the rule of law. Investors need to feel that there's a set of rules that everyobdy has to adhere to, that contracts will be respected and so on. Investor rights need to be protected. Corrupt environments and weak investor protections from scams and corrupt financial systems mean stocks trade at a massive discount. In Russia assets can be confiscated or reassigned by the government. CEOs can be jailed for going against the existing power structure.

America has the strongest or equal strongest market protections in the world. But once a government starts ignoring the rule of law and shows no respect for longstanding international agreements that they've previously signed up to that can change in an instant. It won't happen all at once but a Trump administration that gradually erodes trust in the rule of law and the institutions of government will inevitably cause US stocks, bonds and other assets to trade at a discount. Maybe even a significant discount.