“A wise trader never ceases to study general conditions.”
— Edwin Lefevre
The media highlight the biggest new stories at the end of each year.
Among the key events are President Donald Trump’s first year in office, two major hurricanes, the North Korean threat of nuclear war, the national anthem controversy, sexual harassment exposés, the solar eclipse and a major terrorist attack in Las Vegas. The “You Blew it!” column below features even more significant developments during the past year.
On Wall Street, the two major stories were the record-breaking stock market and the Bitcoin phenomenon. Both were largely missed by establishment economists and pundits.
But that lack of foresight did not affect my Forecasts & Strategies subscribers. We stayed fully invested throughout the year and ignored the doom-and-gloom crowd that are constantly predicting a stock market collapse. And we profited several times from the cryptocurrency mania (once doubling our money in four trading days!).
A Year Like No Other on Wall Street
Indeed, 2017 was truly an amazing year for the stock market. It surely was a Goldilocks phenomenon, with the markets not too hot or cold, but just right. Volatility (as measured by the VIX index) virtually disappeared, even for the notoriously unstable Nasdaq. None of the major indexes fell by more than 10% at any time. For the first time in history, at least one of the major U.S. stock indexes rose every month last year. (The Dow and the S&P 500 Index fell slightly in March, but the Nasdaq rose.)
Bull markets climb a wall of worry, and there was no shortage of bad news stories that could have derailed this market. But no correction materialized. I also see 2017 as a relief rally, a break from the eight-year imposition of higher taxes and regulations under the Obama administration. The Trump tax reduction on businesses is simply icing on the cake that is likely to extend the market rally into next year.
I have no doubt that this bull market will end someday, and that a major correction will hit unexpectedly, but it’s not easy to know when. As T. Rowe Price once said, “No one can see ahead three years, let alone five or ten.” We have our protective stop orders in place for when the bull market ends.
A Personal Triumph
Personally, 2017 has been a great year, culminating in the celebration of my 70th year. As long as I stay healthy and active, I enjoy getting older. (See Lin Yutang’s essay on “Growing Old Gracefully” mentioned in my review: http://mskousen.com/2007/03/the-art-of-letting-go-2/). I plan on writing Forecasts & Strategies until at least the year 2030, my 50th year of the newsletter.
I enjoyed traveling the world this year (Asia, Europe and Latin America) and meeting hundreds of my subscribers at the MoneyShows, Investment U and the New Orleans conferences. FreedomFest was a big success, with more than 2,000 attendees. Celebrating Steve Forbes’ 70th birthday and my interview with William Shatner were huge hits. I also enjoyed our Austrian economics river cruise down the Danube in September.
My academic career advanced in 2017 with my appointment as the first Benjamin Franklin Presidential Professor at Chapman University. In addition to teaching students at Chapman U and Sing Sing Correctional Facilities, I gave two major lectures on gross output (GO) in Seoul, Korea, (appropriately on Friedrich Hayek’s birthday, May 8, before the Mont Pelerin Society) and in Stockholm, Sweden last November for the prestigious Schumpeter Lecture.
Here’s to more good news as we enter 2018. I wish you all a happy and most prosperous New Year!
Good investing, AEIOU,
Orlando MoneyShow, February 8-11, 2018: I’m delighted to return to the Orlando MoneyShow, where I will be giving a new presentation on “ETFs vs. Mutual Funds, Why You Need Both! (Plus, My Five Favorites).” I’ll also be doing an encore of the “great debate” with Mike Turner on “The Economics Professor vs. the Mathematician: Buy-and-Hold vs. Market Timing.” To sign up for your complimentary tickets, go to Skousen.OrlandoMoneyShow.com.
Global investor extraordinaire Jim Rogers and “Rich Dad” real estate expert Robert Kiyosaki have both confirmed to speak at FreedomFest, July 11-14, 2018, Paris Resort, Las Vegas: Our theme is “Where is the Voice of Reason?” in honor of Reason magazine’s 50th anniversary celebration. Steve Forbes and John Mackey will return as co-ambassadors. And Alex Green, chief investment strategist at the Oxford Club, will defend the rich in a debate with Lanny Ebenstein, author of “Tax the Rich More!” It is not to be missed! Sign up now and get $200 off the registration fee — you pay only $495 per person/$795 per couple if you register before March 31. Go to www.freedomfest.com, or call toll-free 1-855-850-3733, ext. 202.
You Blew It! Fake News Highlights Russia — Who Cares?
USA Today ran a front page headline this week, “2018 offers no resolution in sight on Russian inquiries,” as if the public was fascinated with this never-ending investigation of Russian meddling in the 2016 presidential election.
The fact is that nobody really cares about this issue that has cost taxpayers millions of dollars as the Senate, the House and the FBI separately investigate this non-issue. Yet the fake news on Fox, CNN, MSNBC and the major networks go on and on about this “news to nowhere.”
If the mainstream media was really interested in covering important subjects that make a difference, how about covering the terrible tragedy going on in Venezuela, where 32 million citizens are systematically being denied life, liberty and property at the hands of a mad communist dictator?
Only the New York Times and the Washington Post have covered this story on their front pages — I’ve yet to see any major coverage of it by the television news organizations.
A recent survey indicated that the tax cut bill just signed by President Trump is not much of an issue with Americans. That may be true, since the new tax is extremely complex and actually may raise taxes on those who deduct mortgage interest, real estate taxes and state and local income taxes.
What Americans do care about is pocketbook issues — wages, salaries, jobs and the cost of living. And for most Americans, I expect better news in 2018. If the economy improves next year, it will be a positive benefit to Republicans in office.