When This Happens… The Average Stock More Than Doubles

Yesterday, the Dow rose another 165 points – or about 1%.

No pre-Christmas panic this year.

Tomorrow, we will reach into the archives for a visit with Christmas Past.

Today, however, we give you a little Christmas Present.

A Grotesque World

We have been trying to understand the Fed’s position… and its new “tightening” cycle.

The Fed is trapped, we concluded.

When adverse conditions appear – a bear market or a recession – it won’t be able to stay the course.

Since adverse conditions are guaranteed, sooner or later, the Fed can never return to “normal.” It has created a grotesque financial world.

Now, it will have to live with it… and be destroyed by its own monster.

How?

Faced with a new crisis, it will bring out new “tools,” new tricks, new experiments. These will be merely variations on the fundamental magic – creating money out of thin air.

Exactly how, when, and to what effect will this develop?

We wish we knew! But it is bound to be exciting.

Another depression? Dow 50,000? A pack of gum for $25?

Anything is possible.

Put on your seat belts. Sock away some Krugerrands. Offer your neighbors some Christmas cookies and eggnog. What else can you do?!

Diehards and Lost Causes

But here’s another Christmas present…

It’s nothing new. And we didn’t spend a lot of money on it. But it’s the thought that counts.

Here goes…

When you go to buy a stock, you might ask yourself: Is this stock likely to go up?

But that’s the wrong question.

You don’t know whether it will go up or not. No point pretending.

The right question: Has this stock gone down enough?

Now, we’re getting somewhere. Now, we’re harnessing our natural, very becoming modesty and putting our ignorance to work for us. We don’t know the future. But we can know the past.

And it is not for nothing that we are a friend to underdogs, diehards, and lost causes. It pays!