The good news? Incompetent leaders don't stop pioneers

...chances of the Dow industrials' leading in the next market cycle could be as slim as ever, and investors who ignore the dynamos leading the other indexes do so at their own peril.

Current conditions are not unlike those in the late 1970s — the last time America was saddled with an incompetent administration facing serious challenges both foreign and domestic. But as bad as things got, they weren't about to deter the entrepreneurs coming up with new products and services that would redefine their industries, revitalize the economy and create thousands of new jobs.

The chart above shows how the Dow rolled over and moved mostly lower in the Carter years, ending about where it began when Carter was elected. But the Nasdaq just kept going, more than doubling in the same four-year stretch. And that was before Reagan.

Entrepreneurs in those days were as unimpressed with talk of "malaise" as they are today with talk about how America is in decline, owes an apology to the rest of the world and offers no opportunity to the less fortunate.

In truth, America is the only place that makes freedom work for people willing to do what it takes to turn their dreams into reality and raise the standard of living of others in the process.