
About
this time last year I was convinced we were heading into a bear market.
My prediction back then was the S&P 500 would make its way down to
1000. I didn't think it would reach down to 741 as it did in November.
I also thought the dollar would rally. It did during the latter half of
the year as the energy and commodity trade unwound and massive
de-leveraging occurred. The British economist, John Keynes believed
government investment in infrastructure and low interest rates are
needed to stimulate the economy and avert depressions. I'm not an
economist but a student of mathematics and experimentation. We are
about to witness the largest experiment of the Keynesian theory the
world has ever seen (see how the IMF and World Bank are doing, they are
Keynesian products). From a market perspective, I see a trading range
all year interspersed with powerful bear market rallies. I believe we
will see the S&P test 750 again and 1200 on the high side. I had
government cheese in elementary school. Back then I didn't know the
difference. I wonder if we should care if the new infrastructure
spending on technology has a cheesy taste. Maybe the polyester suits
from the 70's will come back too.
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