So Goes the Year?

Multiple Bubbles

No Credit Crunch

“Two Bubbles Off Dead Center”

Living with a Chef in Puerto Rico

You’ve heard the old stock market adage, “As goes January, so goes the year.” If so, 2022 will be a wild ride.

Of course, in this context “wild” doesn’t necessarily mean a loss. But it could, and given the well-documented human tendency to buy high and sell low, actual investors could easily lag behind even dismal-looking benchmarks.

The old and often-maligned, “It’s different this time,” is undeniably correct, too. We have never in market history seen anything comparable to the last two years. The virus itself, the fiscal and monetary policies it provoked, the market response to those policies… none of it has been remotely “normal.” We can’t rely on precedent when everything is unprecedented.

Today I want to wrestle with this problem. We’ll review what may be the most compelling bear case I’ve seen in a long time, along with some other unpleasant data. Then we’ll look at some equally compelling reasons those views may be wrong. The best metaphor I can think of is Christopher Columbus seeking a new route to Asia. He and his crew had only a vague idea where they were going… and no idea at all what they might run into first. We’re in truly uncharted waters.

Here I need your implicit promise. If you read the first section, you must read the second and third sections. I don’t want to leave you out on the ledge. The first two will generally be the opinions of others. The final section will be my own.