All That Matters: 250 Years of American Optimism
In this episode of All That Matters, Mike and Ross celebrate America’s 250th birthday and reflect on moments of American resilience, the power of innovation and the enduring optimism that continues to shape the country’s future.
Mike: Welcome to All That Matters with Mike and Ross. I’ve never been more excited for an episode. It’s the 250th anniversary of the United States of America, and we’re celebrating with a few stories and some investing lessons. I’m rocking the USA hockey jersey, and Ross has his colors on. Ross, are you ready? Have you prepared for how we’re going to convey just how great this nation is?
Ross: I am prepared. I know you have some stories ready for us, stories you shared with clients in perhaps the most American place of all: the Air Force Museum. So yes, let’s pull it all together in the most American way possible. Let’s celebrate 250.
Mike: Here’s what we’re going to do. We have three sections I think you’ll enjoy. First, we’ll talk about a couple of critical moments in American history and why they matter, not only for America, but for you as an investor. Then we’ll talk about American innovation. You may not believe how many things the United States has created for the world. And finally, we’ll end with the Miracle on Ice in 1980, an important cultural moment for the United States, and one this hockey jersey will help bring to life.
Crucial Moments in American History
Mike: Let’s start with those crucial moments in American history: Valley Forge and Gettysburg. We’ll keep the summaries quick so the lessons are clear. The United States signed the Declaration of Independence in 1776. A couple of years later, the army was beaten, freezing at Valley Forge and forced to regroup under new leadership and training. It was a moment when the country could have fallen apart at the very beginning. Then, there was Gettysburg, the seminal battle of the Civil War. The Confederates had the Union positioned in front of the town, and at the far end of the line, a regiment from Maine defended Little Round Top. If they had fallen, the whole line may have folded, and the war may have ended differently. Both moments bring the idea of fragility to light. When something difficult is happening, it can feel like everything is about to fall apart. But in America, we have a long history of surviving difficult moments. Think about 9/11, COVID or the global financial crisis, moments when investors felt that same fragility. Yet we came out stronger on the other side, just as we did after Valley Forge and Gettysburg. Ross, when you think about investing and the message we always try to convey to clients, what matters most in those critical moments?
Ross: When you’re in the middle of a dark time, whether it’s geopolitical, a war or an investing moment like the global financial crisis, you have to hold on to a kernel of optimism that things will get better. I often think about Warren Buffett’s op-ed in The New York Times in late 2008, when the financial crisis was roiling markets and banks were failing. The title was “Buy American. I Am.” He understood that he could buy a slice of America at a discount, and he believed things would get better. That’s not easy to do, whether you’re talking about the 1700s, 1800s, 1900s or today. But that belief, that the system we’ve built is resilient and will persevere, is what matters most. We’ve seen it again and again, certainly in the last 30 years, and across key moments in U.S. history.
Mike: I always say it’s easy to hold stocks in a bull market. That’s practice. Think about 2023, 2024, 2025 and now parts of 2026. Yes, there have been moments of stress, but the stock market has delivered incredible gains over the past few years. Holding stocks when things are going well is practice. Holding them when the world feels like it’s falling apart is the Super Bowl, whether that was 1987, 2020, 2022 or any number of difficult moments. Those moments, Valley Forge, Gettysburg and the market crises we’ve lived through, are crucial because they reveal something important about the American character: our ability to persevere, learn and keep moving forward. On the other side of those moments can be extraordinary achievements, whether that’s reaching the moon or growing your wealth. These are the moments where Americans really shine. During COVID, for example, we came together. We didn’t splinter apart.
The Power of American Innovation
Mike: Let’s move on to one of my favorite topics: American innovation. I’ll list a few examples, and Ross, maybe you can add some of the things Americans have created for the world, from railroads and radio to aviation, the internet and AI. What comes to mind for you?
Ross: You mentioned a few big ones already: the telephone, the internet, the airplane, the light bulb. We could go on and on. Even the entire AI ecosystem is built on integrated circuits and transistors that were created here. I think the core of why the American experiment has worked so well is the country’s startup quality and the entrepreneurial spirit baked into the culture. We have about 4% of the world’s population and roughly 60% of the world’s unicorns, startups worth $1 billion or more. There are as many unicorns in San Francisco as there are in China and India combined. That entrepreneurial spirit matters. When you combine it with a large, productive labor force, capital markets that are ready to fund ideas and a business-friendly regulatory environment, you get something powerful. For investors, it’s almost the perfect mix. It all comes back to entrepreneurialism, innovation and the creativity to invent things like the internet.
Mike: Exactly: the internet. I want to put an image up on screen that I created in ChatGPT from a stat I found online. It looks at companies created from scratch, companies that started from zero and are now worth more than $10 billion, over the past 50 years. The image shows 241 of them were created in the United States, compared with 14 in Europe.
Why is that? Europe has smart people, technology and innovation. But this is what makes the United States so unique. People come here to create. There’s a marriage of investors and ideas that can flourish in a country like this. Jeff Bezos once said our “secret sauce” is Silicon Valley, a place where an idea may sound crazy at first, like graphics chips for better video gaming, until it becomes NVIDIA and is worth trillions. Think about the great companies of the past 50 years. So many started here. Europe has a more regulatory environment, and its entrepreneurs often struggle to scale. The United States gives them room to flourish. That’s why this number exists, Ross. OMG
Ross: There was a major report on why Europe has lagged the U.S. over the past 25 years, and one stat stood out to me: Between 2008 and 2021, close to 30% of the unicorns founded in Europe relocated their headquarters abroad, most of them to the U.S. So, the ideas are there, and the people are smart, but they don’t always meet the right regulatory and capital environment. In the U.S., those things come together. That doesn’t mean the U.S. is perfect, but compared with peers abroad, it creates a powerful environment for company formation and growth. And this doesn’t only happen in good times. Take the stagflationary 1970s, one of the most difficult decades of the last century. Starbucks, Microsoft, Costco, Apple, Oracle, Home Depot and UnitedHealth were all founded during that period. That’s just a short list.
Mike: Starbucks is a great example. Coffee had been consumed in Europe for hundreds of years. But Howard Schultz, in Seattle, Washington, saw an opportunity to create a premium coffee experience in the United States, and look what it became. Investors, whether they got in early, later or simply owned it through mutual funds, benefited. Americans took coffee and turned it into incredible value. That’s what we do. We bring together our capital system, our people, our rule of law and our creativity, and investors get to participate in that. You do, Ross. I do. My family does. Our clients do. We all get to invest in this phenomenal melting pot of value. I could talk about that forever, but let’s move on.
A Lesson in Optimism
Mike: I want to talk about the Miracle on Ice because it carries a lesson I truly believe everyone should take to heart. We’re talking about February 22, 1980, coming out of the 1960s and 1970s, difficult decades for the United States. The late 1960s were extremely challenging. The 1970s included one of the worst bear markets in history. Then, in the early 1980s, we were facing the Cold War. People wondered whether America was struggling, whether we were falling behind.
Then this group of men played a hockey game in Lake Placid. Ross, I’ll ask you a rhetorical question: As those players sat in the locker room getting ready to face the Soviet team, do you think they were optimists or pessimists?
Ross: I think they gotta be optimists, Mike, right? You have to go out there and believe you can win.
Mike: Right. There’s no way those men sat there thinking, “We can’t beat them.” They weren’t focused on all the reasons it couldn’t happen. They were probably thinking, “This is our moment. This is our time to show the world who we are. We’re America, and we can win.” It’s the same idea for investors. You can’t sit there and say, “The world is bad for America. Things are going downhill. They’ll never be this good again.” That’s not the mindset of people who succeed as investors or as citizens. The people who succeed are the ones who say, “Yes, things are difficult. Yes, we have problems and challenges. But over time, we’ll solve them, and we’ll continue to lead.”
Ross: Investing is fundamentally an exercise in optimism. You have to believe in an idea, a concept or a business that can grow and flourish. We have so many clients who are small business owners, people who saw an opportunity or a need in their community and stepped up to create value. That is optimism in action. Whether it’s hockey, and by the way, Miracle is an all-time classic movie and a core text of my childhood, or whether it’s business, investing starts with that kernel of optimism. As investors, we get to participate in the greatest wealth-creating machine the world has ever known. If there’s one message we hope comes through in our videos, it’s that Mike and I believe deeply in that optimism.
Mike: And frankly, we’ve been right to take an optimistic view of the world when it comes to the intersection of your money and world events. Look at what’s happening now. Anthropic is only a few years old and is already changing the world. The AI revolution is happening here in the U.S. If you’re sitting in cash because you don’t like the political environment or the state of the world, you risk missing one of the greatest periods of wealth creation in history. Optimists are the ones who benefit from that, just like optimists win hockey games they aren’t supposed to win. At that moment in 1980, America understood that the future was still ours. We knew we could lead the world into the decades ahead, and we still can. So let’s end with something that inspires me about the United States, and then Ross, I’d love to hear a story from your life. I love history, stories and technology, and I’m passionate about aviation. I think the airplane may be the invention that changed the world the most, maybe Taco Bell, but probably aviation. The Wright brothers were Americans. In 2021, the United States sent a rover to Mars, because we keep exploring. On that rover was a small helicopter called Ingenuity, and Ingenuity flew on another planet. The American people sent a helicopter drone to Mars. And on that helicopter was a small swatch of fabric from the Wright Brothers’ flyer. They took fabric from the first man-made flight in human history and flew it on another planet. That gives me chills, Ross, because that’s America at its best. Is there something that inspires you, local, national or otherwise?
Ross: I have something much more local, but it reflects the same idea: innovation and entrepreneurialism. There are always kids down the street with a lemonade stand, and on one hand, I’m thrilled kids are still doing lemonade stands. Future entrepreneurs, right? I walked by the other day and didn’t have any cash, because I never have cash, classic millennial. These kids took Apple Pay. Apple Pay for lemonade. And I thought, whatever this future generation is called, we’re in good hands.
We’re starting businesses at a record rate. People investing today can look back at what made this country great and still be excited about the future. It’s a great time to be investing, and as we speak, the stock market is near all-time highs despite everything we’ve been through.
Mike: To sum it up, Ross and I are passionate about what we do. We’re passionate about Baird, and Baird celebrates the greatness of our nation. We believe the way to succeed is to acknowledge that the world can be crazy and chaotic, and then recognize that Americans, in particular, are very good at navigating chaos, creating through chaos and thriving through chaos. For the next 250 years, the United States will still exist. We’ll still be a powerful force in the world. We’ll still be the world’s reserve currency. I believe that deeply because of the American people, including those kids adapting by taking Apple Pay. Think about how quickly we adapt to the future. During COVID, restaurants sold food out of windows because Americans know how to find a way forward. Our nation is great because its people are great. That’s what we celebrate: the people of the United States, including you, Ross, me and everyone at Baird we speak for. The greatness of this nation will continue because it lives in its people.
Ross: Yes, sir. Mike, you ended it well. Let’s send the people home, and happy 250th.
Mike: Happy 250th to everyone out there. We hope you enjoyed this episode, and we hope you’ll join us next month for another episode of All That Matters. We’ll see you in August. Thanks.
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