Fundamental Madness
Market Psychology
More on Where We Are Now
There’s Always a Bull Market Somewhere
It’s Actually a FANG (and Now Tesla) Market
Holiday Wishes and Some Schedule Changes

"History repeats itself, that's one of the things that's wrong with history.”

—Clarence Darrow (1857-1938), American lawyer

The end of 2020 has me looking back. I started writing the letters that later became Thoughts from the Frontline back in the late 1990s. Similar to COVID-19 today, we had a giant macro issue then, too: Y2K. It’s hard to believe now how frightened some people were. But as I expected, the big day came and the world didn’t end.

Another similarity is the stock market was rising like a rocket. This newfangled “Internet” thing had people super-excited, and rightly so. It was a world-changing paradigm shift. Unfortunately, some of the stocks born in that incredible boom weren’t world-changing paradigms at all. The market party ended, just as this one will, but went on far longer than almost anyone (including me) expected.

Had you bought the Nasdaq at the March 2000 peak, and held on, you would have got back to breakeven about 15 years later. And now, 20+ years later, your annualized return for those two decades would be around 4%. That’s not terrible. You beat CPI inflation by a couple of points. But people back then expected far more—15% annualized returns were thought to be easy.

The moral of the story is simple: Starting valuation matters. In the example above, waiting a couple of years to start lower would have drastically changed the outcome. But again, almost no one thought that at the time.

And while we’re talking about valuable things, please let me remind you that the window of opportunity to become an Alpha Society member this year is closing soon.

The Alpha Society is our most exclusive membership service—and the one that is nearest and dearest to my heart.

It was born out of my desire to create an “inner circle” of serious investors. I have watched it grow over the years like a proud father watches his kid’s first steps, first day of school, first football game... all the way to graduation.

We’ve upgraded many of the features this year—for example, you’ll find a brand-new version of the Alpha Council, our members-only social media platform, which now looks a lot like Facebook. You can meet your fellow Alpha Society members there, as well as our editors. I sometimes stop in to chat as well.

New members also receive a hand-selected bonus package I’m sure you will enjoy. It gives you free access to three of Mauldin Economics’ most popular events and specialty products.