Market Review: A Year in Review
"Anyone who has ever cracked open a history book couldn’t help but know that French history is drenched in blood…" wrote Bill Bonner in April. "The French have had enough of war – at least for now. Let them enjoy a well-earned cowardice…"
The essay touched a nerve – and over the next few days, we received hundreds of emails on the subject. In fact, the essay – titled "In praise of cowards" – generated so many reader comments, we had to devote an entire Saturday just to read them all.
Not that we’re complaining. We love receiving emails from our readers. In fact, we love the reader mail so much, we’ve decided to republish the essay!
"In Praise of Cowards" is just one of 12 retrospective essays we’ve selected to mark the passing of 2004. Controversial, insightful, or just plain entertaining, these 12 essays represent the best of the Daily Reckoning in 2004. You can find the links to these essays below. In the meantime:
Raise your glass, dear reader, to 2004, the year everything went up…
January 1-2, 2005
The Daily Reckoning
P.S. Forward-looking readers will be less interested in 2004 and more interested in 2005…after all, you don’t make money by dwelling on the past. Fear not…we’ve got it covered, at least, Chris Mayer has anyway. The fearless editor of the Fleet Street Letter has made 7 stunning predictions for 2005.
THIS YEAR in THE DAILY RECKONING
01/28/04 FLIGHT TO GARBAGE
by Marc Faber
"…2003 will enter the financial history books as the year in which all asset classes increased in value, with the exception of the U.S. dollar. The entire global investment community has been seduced into believing that all asset classes will continue to appreciate in 2004. But in my opinion, asset markets will again show diverging performances…and the surprise of 2004 could be renewed economic weakness…"
By Porter Stansberry
"…Beginning in January 2000, [Sir John Templeton] sold short 84 different Nasdaq stocks. On average, he made over $1 million per position, increasing his fortune by 50% in just a few months…Now, for the first time since January 2000, you will find Nasdaq 100 stocks trading at the same kind of absurd valuations as they did at the top of the bubble…What should we do? It’s simple. We sell the market."
03/17/04 GRUMPY OLD MEN
by Steve Sjuggerud
"…There are the Grumpy Old Men…and then there are the Elite Old Guys. The Elite Old Guys are the investors you’d REALLY want to have on your side. Let’s take a look at the most credible investors on Wall Street – that small handful of Wall Street old-timers that have actually survived horrible bear markets, that bought stocks heavily when prices were low and nobody was willing to buy, and are still around today and are still relevant…"
04/09/04 IN PRAISE OF COWARDS
by Bill Bonner
"…One of the many conceits Americans permit themselves is that they bravely face up to the world’s terrorist menace, while others – most notably, the French – cower in fear. But anyone who has ever cracked open a history book couldn’t help but know that French history is drenched in blood…The French have had enough of war – at least for now. Let them enjoy a well-earned cowardice…"
04/14/04 SNOWDRIFTS OF DEBT
by Chris Mayer
"…Inflation (an expansion of the money supply), or legalized counterfeiting, is the modern spin on an old idea. The forces that led to these earlier swindles are converging now on a debt-laden America. From Solon, to Roosevelt, to Nixon’s closing of the gold window, the tradition of fraud is evident…[but] these debts must be dealt with; they cannot grow indefinitely at their current rates…"
05/11/04 IMBALANCES AND DISLOCATIONS
by Dr. Kurt Richebacher
"…For most American economists, sufficiently easy money is of infallible efficacy. The few instances in history when record-low interest rates persistently failed to work, like recently in Japan and during the 1930s in the United States, are summarily discarded with the argument that central banks failed to act fast enough…"
05/20/04 BOB THE PLUMBER
by Karim Rahhemtulla
"…Bob came through and we met for lunch. He was very excited about the stock market. He was making a lot of money using this new system that worked solely by using standard deviations and trading in the first ten minutes of the day. I pretended to care. I was actually upset. "Bob, I thought you gave up day trading after getting killed in the tech-bubble." I prodded…"
05/19/04 FLASH BUBBLES
by Dan Denning
"…Third, however, and greatest of the policy blunders is the assumption that monetary policy can cause wage inflation. Because of this error, the Fed is about to discover that its entire effort to reflate the economy through low rates has failed. And it is nearly out of interest rate bullets…"
06/29/04 THE ONCE AND FUTURE KING
by Dan Ferris
"…Perhaps by now you’ve guessed that the answer to these questions, the most unwanted asset today, the one thing nobody seems to want to own, the one asset people can’t seem to get rid of fast enough, is…"
07/09/04 REDISCOVER AMERICA
by Bill Bonner
"…Yesterday, we crossed a desert section of North America. That is, ‘desert’ in the old sense. We would say ‘deserted’ in today’s language. Explorers tromped from the north shore of Nova Scotia, on the Bay of Fundy, to the south shore on the Atlantic nearly 400 years ago. Today, along both coasts, there are modest habitations. But the interior is still kept in reserve by the Deity and mosquitoes…"
10/28/04 TANGIBLE ASSETS THAT SWEAT
by Chris Mayer
"It is an old adage on Wall Street to buy cheap and sell dear. But it is often overlooked, as investors continually overpay for businesses that they have fallen in love with."
12/03/04 THE FABULOUS DESTINY OF ALAN GREENSPAN
by Bill Bonner
"In addition to the bad theory, Mr. Greenspan had bad information. The ‘information age’ brought more information to more people – including to central bankers…but the more information people had, the more opportunity they had to choose the misinformation that suited their purposes."
THIS WEEK in THE DAILY RECKONING
LET THE GOOD TIMES ROLL 12/31/04
By Bill Bonner
"Until very recently, the foreigners seemed perfectly happy merely to hold the U.S. paper. They liked the feel of it. They felt richer and more secure with each bundle that came their way. By the end of 2004, they had racked up some $10 trillion worth – nearly $3 trillion more than Americans had of their assets."
MARKET MISCONCEPTIONS 12/30/04
by Marc Faber
"In my experience as an emerging market investor, and also from what I have read about previous capital investment rushes over the last 200 years, it would be most unusual if the recent great China investment boom ended any differently than the various canal or railroad booms of the 19th century, or the great European investment rush into Russia at the beginning of the 20th century!"
SCIENCE – SHAKEN, NOT STIRRED 12/29/04
By Carl Waynberg
"The 9.0 earthquake that shook the earth under the Indian Ocean was an anomaly. There are relatively few examples of this kind of seismic hyperactivity and many more examples of lesser activity, and the relationship between the two follows a precise mathematical model."
THE MISSING LINK 12/28/04
By Dr. Kurt Richebächer
"In essence, the lower inflation rates allow a looser monetary policy than domestic conditions justify. For Greenspan and many others wanting the loosest possible monetary policy, this was certainly a highly esteemed effect of the trade deficit. For us, it is insane."
ECONOMIC NIGHTMARES AND FINANCIAL MONSTERS 12/27/04
By The Mogambo Guru
"There are angry government agents and desperate neighbors, and even more desperate strangers banging at the door, because they have also finally realized that there is no such thing as a free lunch, and they are galvanized into action because they also suddenly realize, in their stupid small-brain little way that makes you want to slap their faces and shout, ‘Wake up, you moron! Your government is Destroying your country right before your eyes!’"