One of the greatest competitive advantages American companies have over their foreign counterparts is that the United States attracts the best and brightest people from around the world to live and work here.
America is like Goldman Sachs in this regard. Or Amazon.com. Or Google, a subsidiary of Alphabet.
These companies don't need to advertise to attract talent; incredible people come to them. This is why America's immigration policy is so important to entrepreneurs and executives like:
- Mark Zuckerburg, the founder and CEO of Facebook
- Bill Gates, the founder of Microsoft
- Marissa Mayer, the CEO of Yahoo!
With this in mind, I went through a couple dozen of the biggest companies on the S&P 500 by market capitalization to see if any of them were founded or currently led by immigrants. A meaningful percentage of them were, including the following five current and former CEOs, in addition to a co-founder of one of America's greatest technology company:
- Google's CEO Pichai Sundararajan (India)
- Microsoft's CEO Satya Nadella (India)
- Pepsico's chairperson and CEO Indra Nooyi (India)
- Pfizer's CEO Ian Read (Scotland)
- Intel's former CEO Andrew Grove (Hungary)
- Alphabet's co-founder Sergey Brin (Russia)
The circle broadens considerably if you include second- and third-generation immigrants as well. In the bank industry, for instance, which I follow closely, doing so would capture one of the best bankers in the United States (and probably the word): JPMorgan Chase's (NYSE:JPM) CEO Jamie Dimon, who's paternal grandfather immigrated to the United States from Greece in 1921.
Dimon helped the government not once, but twice during the financial crisis. He agreed to acquire Bear Stearns in March 2008 at the behest of the Federal Reserve and U.S. Treasury Department. Six months later, he oversaw the acquisition of Washington Mutual, one of the biggest depository institutions in the country.
Had it not been for JPMorgan Chase's assistance, it isn't unreasonable to assume that Washington Mutual might still be a ward of the state today. At the very least, it wouldn't have fallen into such capable hands as Dimon's and JPMorgan Chase's.
In this way, the United States' ability to attract talent from elsewhere translates into a robust competitive advantage for American companies. This boosts their sales and expands their margins relative to competitors abroad.
This is one reason (among many) I believe investors can be confident about buying shares of American companies, even in times like today, when the market is hemorrhaging because of concerns abroad. The people running these businesses are among the best and brightest in the world. If anyone can figure out how to operate in challenging times, they'd be (and are) at the top of that list.