It's been said that the market is the ultimate forecaster - discounting future's reality into current stock prices.

In the excellent new book Wealth, War and Wisdom, Barton Biggs outlines in captivating and convincing fashion how the "wisdom of crowds" in the stock market actually interpreted events of World War II much better than the "experts" of the day. Stocks topped out in Germany well before Hitler's Nazi military did. Conversely, the U.S and the U.K. markets bottomed well before the Allies looked like they had any hope of victory.

Not surprisingly, therefore, was that despite this week's continuation of dismal economic news, the market had great a week. The very future-orientated ThinkGrowth Index was up a whopping 7.1%, followed by NASDAQ 100 up 5.6%, NASDAQ advancing 4.9%, and the S&P 500 up 4.2%.

Putting the cherry on the top of evidence of a 2008 recession were the 80,000 jobs that were taken out of the U.S. economy in March, the highest number in five years. The unemployment rate jumped from 4.8% to 5.1%.

While anyone who reads ThinkThoughts knows that I have a bullish bias, I do have a very major concern about the long-term supply of knowledge workers in the United States and the impact that it will have on U.S. competiveness. The 80,000 jobs coming out of the economy are a cyclical issue that is part of the ebbs and flows of capitalism, but as the economy rebounds, more jobs will be created. The problem with how that demand will be met is a secular issue that doesn't lend itself to any easy solution.

Twenty five years ago, A Nation at Risk was published stating that the United States' preeminence in commerce, industry, science and technological innovation is being overtaken by competitors throughout the world. It went on to state that "the educational foundations of our society are presently being eroded by a rising tide of mediocrity that threatens our very future as a Nation and people..." If an unfriendly foreign power had attempted to impose on America the mediocre educational performance that exists today, we might well have viewed it as an act of war.

Despite the identification of the problem a quarter century ago, progress has been made with the introduction of charter schools and more accountability has been driven by programs like "No Child Left Behind" (despite what the critics say), far too little has been achieved for most kids, and at the same time countries around the world understand that education is the key to the future. To get some perspective on this, check out the "Two Million Minutes" trailer that tracks the two million minutes a high-school kid gets from ninth grade thru twelfth grade in preparation for college and life. http://www.youtube.com/watch?v=WS_QENuOYL8
The documentary trails kids in America, India and China with the punch line that American kids don't appreciate that they are in a global competition for the future, while everybody else understands that.

The silent epidemic, which is even more disturbing, is the fact that about one third of all public high-school students and one half of minority students fail to graduate with their class every year. Every 24 seconds, a student drops out of school - about 1.1 million a year. Obviously, the impact this has on society is enormous, with significantly higher rates of unemployment and dropouts, poorer health, greater public assistance, and an eight-time higher possibility that a dropout will end up in jail. If we are able to reduce dropouts by 50% for just the 20 year-olds, the estimated economic benefit will be $45 billion through increased tax revenues and the reduction of the need for assistance programs.

Think about it, if Boeing (NYSE: BA, $76.65) made a jet with which 33% of the time passengers wouldn't make it to their destination, there would be public hearings and Boeing would not exist. If Medtronic (NYSE: MDT, $49.65) made a pacemaker with which 33% of the patients died with a year of surgeries, the FDA would shut them down. Yet we have an educational system in America with which 33% of the kids never make it to the minimum entry level to participate in the knowledge-based economy in a global marketplace.

Perhaps the market this week was looking out and positively interpreting a news announcement in Washington D.C. on Tuesday by America's Promise (www.americaspromise.org) to take on the dropout epidemic head on by focusing on the 15 million kids who are most at risk. America's Promise is Colin and Alma Powell's foundation that is focused on providing the five promises which have been shown to make the difference for kids staying in school and succeeding - providing caring adults, safe places, a healthy start, effective education and opportunities to help others. There is nothing more important for the future of our country than to provide the American Dream to all children here, and General Powell has the kind of credibility and political/economic capital to help fulfill this vision. We at ThinkPanmure are very proud to be sponsors of this program.

We continue to be optimistic about the opportunities on making outsized returns in the premier growth equities. The volatility we see is a friend of the long-term investor, as have been the "sale" prices of leading stocks.