The Dividend Cafe - The Last Best Hope...of Markets

Episode Date: June 26, 2026

Today's Post - https://bahnsen.co/4v7DfvO From Grand Rapids, David Bahnsen reflects on a speech and borrows Abraham Lincoln’s “last best hope” language to argue that markets—properly understood as broad venues of human exchange, entrepreneurship, and capital formation, not merely the stock market—are inherently forward-looking declarations of optimism. He contrasts market incentives with media and political incentives that often reward negativity, and contends that entrepreneurs and investors with “skin in the game” demonstrate belief in a better tomorrow by turning ideas into solutions that meet human needs. Bahnsen urges defenders of free enterprise to resist dehumanizing markets into charts, ratios, and GDP-only talk, emphasizing the human realities of risk-taking, labor, innovation, and profitably providing goods and services. He previews a mid-year 2026 report for next week ahead of the Fourth of July and the nation’s 250th anniversary. 00:00 Welcome From Grand Rapids 00:36 Lincoln Last Best Hope 03:10 Markets As Hope 03:51 Not Just The Stock Market 05:18 Entrepreneurial Incentives 09:16 Risk And Future Focus 10:11 Humanizing Economics 14:23 Capital Tools And Portfolios 17:32 Closing And Next Week Preview Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com

Welcome to the Dividing Cafe, weekly market commentary focused on dividends in your portfolio and dividends in your understanding of economic life. Hello and welcome to the Dividendon Cafe. I am your host, David Bonson, and I am coming to you from beautiful Grand Rapids, Michigan, where I will soon be leaving, head back to New York, but have had a wonderful week here in our Grand Rapids office, seen a lot of clients, had a couple of speaking events with the Acton Institute of Grand Rapids, Michigan. and am actually inspired in today's Dividend Cafe topic by a speech that I have given here in Grand Rapids this week related to markets. And I'm going to set the table here with a little bit of history. Many of you are familiar, I hope you are familiar, with Abraham Lincoln's utterly brilliant message in December of 1862, his annual message to Congress in which you referred to America's The Last Best Hope on Earth. And that expression, last best hope, has, of course, been memorialized into the historical archive, such a beautiful expression of America's role in the world and the need for us to preserve lest we lose this last best hope.

And Lincoln, of course, had a whole message around this. The American experiment was a litmus test for the rest of the world. and I am borrowing this week from Lincoln's language, partially inspired by the fact that we are going into the 250th anniversary of our nation's independence next week, but also the even outside of that kind of celebratory moment, there is a sort of twist I'm doing on the language in which I want to refer to markets as a last best hope. but I mean something very specific by that. And I hope you'll bear with me as I try to explain for investors, for those of you who are just listening, trying to generally learn what I mean. I want to give you a very quick context.

Three weeks ago, I believe it was. I used our Dividing Cafe to portray the message I'd given at the commencement address, a Pacific Christian high school at their graduation ceremony, I spoke to over 1,000 people about a message of hope and positivity for the future and not believing in our personal lives that certain things that happened to us were fatalistic and irreversible, that we had it in our power, the agency to go and choose to have a happy life. and I have this broad message in my own personal ethos and something I communicated in that commencement speech about the mentality that I think is necessary to live a good life.

And I'm not holding into this theme here this week. I'm talking about markets. I'm talking about something that's specific to the world of business and finance and entrepreneurialism and yet it is inextricably connected to hope for the future. and a broader message of optimism. And I want to suggest to you today that markets properly understood

are inerrantly forward-looking declarations of optimism and hope. Markets are narrowly forward-looking declarations of optimism and hope. In a time in which our media, our politics, so much in our culture, is almost nihilistic in its assumptions, and certainly its sentiment about the future, I would suggest that markets serve as a beacon of hope. And this message today requires some further clarifications. What I am not suggesting is some version of the stock market

when it's going up means that everything is wonderful. Better days are ahead. If the market is going up, meaning the public equity stock market, then all must be well in the world. And first of all, I want to dispense of that as the absurdity that it is, but not merely because I do not mean markets in the way I'm using the term as some sort of synonym for the stock market. I am referring to markets properly defined as a broader venue of human exchange,

of human cooperation, of a venue in which we produce goods and services, and build, trade, produce, consume with one another. And the stock market, of course, is a market, but it is extremely reductionist to talk about markets as if we're just merely talking about one kind of specific venue of public equity ownership and exchange. I also, though, believe it to be an asinine concept because there are all sorts of environments

where stock market might be going up and certain things are very bad. And by the way, plenty of environments. where the inverse has to negate that statement because there are plenty of times I was talking about it may be going down and things are still and should be heralded as very optimistic about the future. No, I'm talking about something much broader. I want to suggest that in this societal moment of victimhood, of despair, when we are

constantly telling young adults how difficult things are, how painful it's going to be, you know, that out of that kind of social and emotional, psychological framework, that there is a sphere in modern life where that projection doesn't make any sense, where people just fundamentally don't actually really believe that. And this is what I refer to by that inerrant optimism. This venue, this place where the incentive structure is categorically different is what we would refer to as markets. what we'd refer to as entrepreneurialism. The euphemism known as business. By the way, I will add Wall Street, which again is sort of shorthand

for a description of financial markets. It's not a geographical, physical domicile, but rather a figure of speech for that place where capital is formed and used as a tool towards productive endeavor. And I do unabashedly defend Wall Street when Wall Street's properly defined, and I do so because the entrepreneurial cycle

that Capital is a tool in, that Wall Street is there to help feed and equip, is to me, perhaps the last best hope we have in a world that is feasting on a negativity right now, and I would add a negativity that is futile. Look, the incentives in media, in politics, are very contrary to what it is I'm speaking about. I want to humanize economics in the way I explain how economics works

because I believe that economics is fundamentally about the human person, so the reality of human nature matters a great deal. How humans act in the context of incentives and disincentives is a vital part of what we mean by economics. The negativity that we see in today's culture is very compatible with the incentive structures that exist, whether it's an activist, a social media influencer, a provocateur, certain media outlets, certain pundits,

certain elected officials, certain prospective electives or political candidates. I think that there is a tremendous incentive structure for negativity. And yet the thing I want to focus is that you can have all kinds of envy, covetousness, hostility, class warfare against an entrepreneurial class, but that entrepreneurial class is fundamentally incentivized to promote a better tomorrow. And when I say promote, I also mean to help create, not merely advertise other people that are trying to produce a better tomorrow, better goods and services enhance our standard of living into the future, but that whether you be an investor, an entrepreneur, creator, innovator, producer, yourself,

that we're not talking about short-term pump and dump schemes. We're not talking about the things that are polyanish. We're not talking about snake oil salesman. I'm referring to this entrepreneurial belief that has capital investment. on the line, has skin in the game, where there's blood, sweat, and tears poured in, that that is fundamentally reflective of a positive view of the future, a positive hope for the future, and that we can demonize those that are engaged in capital formation all we want, but those that are actually putting money on the line are people who believe in a better tomorrow, at least in

their actions, if not their words. And this notion of entrepreneurialism, is a narrowly a voice about the future is self-attesting. The process of having an idea, of fine-tuning it, of improving it, of raising and deploying capital behind it, that there is a risk behind it, that one is contemplated and appreciated. Sometimes there can be failure, there can be adjustment, but turning ideas into solutions that meet human needs and wants is the essence of entrepreneurialism, and it is what we do in markets. And the essence of that is forward-looking by definition. You cannot sell a product in the past. The idea does not lead to sale in the present. The ideas that we formulate in the present and fine-tune into the short-term

future, lead to the idea of a revenue model and a business and a strategy about the future. And this is, I think, a wonderful thing about risk taking. If you want to understand markets in a very negative way, if you want to take out this aspiration, this positivity that I am conveying that I think is very much fundamentally part of what a market is, then there's very little you could do that would be more effective to undermine markets than to de-heaval. How do you dehumanize them? How do you dehumanize venues of human endeavor, venues of human activity, and productive actions?

Well, you demonize it by talking about charts and ratios and graphs and theorems all the time. You talk about GDP, but never explain what makes up the sum of parts and embedded in gross output. You make econometrics of vocabulary that replaces the notion of the humanity of business. And I think it's incumbent upon those of us that love markets and love free enterprise to resist this emphatically. The net effect of impersonizing or dehumanizing market activity, you notice I very much prefer to talk about companies and what businesses are done. doing as opposed to this amorphous thing called the stock market. But it's more than just using the right vocabulary or resisting a subversive vocabulary that undermines the message. We cannot reduce

our economic vision to vocabulary of formulas. We cannot distort the energy, the metaphysical reality that exist in this hope and optimism and allow for a kind of stunted or truncated view of markets that is boring, that is dull, that is dormant. I also, though, I'm not just doing mere semantics. What we are trying to focus on here is business investment that, yes, is capital at risk, that is, yes, part of a company's capital structure that is an attempt to capture or generate a return on investment. But it's also a belief that by putting out, X, you will get back more than X. That the outcome that you receive in the form of yield,

internal rate of return, that may be a debt, the coupon on a debt investment, it may be the dividend or appreciation you get on an equity investment. But understanding that those things are fundamentally driven by somebody successfully and profitably meeting human needs. And I think that in a competitive marketplace, that's very hard to do. It takes a lot of talent, takes a lot of savvy, takes a lot of competitive positioning. And these attributes of humanity are quite exciting. And it generally can happen with an

investment in labor, capitalizing on what human beings are capable of doing in these endeavors. But beyond those relationships of exchange, there's genuine human bonds that transcend all of this. And I think there are hopes and dreams on the line. People trying to create. something, why in the world would any defender of business, defender of markets, defender of enterprise be content to talk about this stuff in merely formulaic terms? And so, yes, I very much believe that there is such thing as gross output. And I believe in something that we try to be able to measure around gross output. But the data points when I talk about macroeconomic reality of productivity, of wages, of employment.

You know, they are not the entirety of the essence of prosperity and success. They follow the real facts on the ground. And those facts on the ground are always in forever about human beings endeavoring to create, grow, and flourish. And so capital is a tool to create things. All of us as investors that are deploying capital into this process, into this ecosystem of both ideas and activities, capital, is a tool in it. And that's a big deal. It works hand in hand with other tools. It matters.

It requires risk. It does require the risk of loss, the risk of adjustment, of mistakes being made. And we learn from those mistakes and then seek to do things better next time around. But when I talk about business and investment and market, they're not mere buzzwords. Okay, they are these tools and venues and concepts that serve as a superior means of generating hope and opportunity. And it's countercultural now. We have so much negativity embedded into so many spheres as society, but our capital markets have not stopped. Our business investment is not stopped. The hope for a return on investment is not stopped. There remains embedded in markets, this actual real life hope for the future, this real optimism.

And so I understand entirely that we view our portfolios for their instrumental purposes. Portfolios are used transactionally to help create a result or a solution in our own needs and specific objectives as investors. Income, growth, expense, charitable contributions, whatever the things we want to accomplish with our capital, the portfolio is a tool, means to do that. But the portfolio itself only generates those returns as a byproduct of the actual process of these markets playing out, of the goods and services being produced profitably and successfully. All of those things require a view of the future that is positive. There is no sign that someone has hope for the future more than them putting their own money, their own skin in the game. into a future endeavor. And of course, there's wise ways to do it and unwise ways to do it. But I wonder if, in all seriousness, all hyperbole outside of this discussion, is the last best hope

for portraying a ongoing sustainable optimism embedded in this oft demonized world of markets, where the entire focus is forward-looking and the entire assumption behind it, is something very hopeful. I am hopeful and optimistic, but I want to suggest to you that all investors are certainly successful ones must be, whether they admit it or not. I think that markets represent our last best hope and those of us who want to go pursue portfolios that meet our objectives ought to understand that what underlies those portfolios are markets that are inextricably connected to hope and optimism. Thank you for listening. Thank you for reading. Thank you for watching the Dividing Cafe.

I look forward to being with you next week as we get ready next week to go into the 4th July weekend and celebrate our 250th anniversary of birth of our nation. I will bring you a kind of mid-year report that I'm very excited about. June 30th will represent the halfway point of the year. I believe that's next Tuesday. And so in next week's Dividendon Cafe, we're going to do a real kind of, I think you'll find it surprising. and I know you'll find an interesting halfway point of 2026. In the meantime, have a wonderful weekend. Thanks so much to be part of Dimmie Cafe. The Bonson Group is a group of investment professionals registered with Hightower Security's LLC,

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