“For now we see through a glass darkly”
― 1 Corinthians

Good Morning,

We are taught all our lives that the darkness, while scary – is before light. The darkness tells us all that light is on the way.

As we all spend time with family and friends (as close as that can be in this crazy window of time), we must dig deep and realize that the darkest of moments comes just before the brightest light.

The darker the night, the brighter the sunrise.

In America – this is good. There is something about this grand group of people called “Americans” that reacts like no other. Overcoming when all doubt. Persevering at the darkest moments. Moving forward through pain, trudging forward until the edge of light dawns.

The tougher you make it – the better we recover, the stronger we get.

But all of that – every ounce of the benefit in the years ahead – will demand our patience and strength to stand tall in the storm. That “beacon” of confidence we provide others in action, stepping forward in all the darkness, slaying the dragons in our collective minds as we trek ahead – is one just reason why the whole world wants to be here.

While this year will be one for the record books indeed, it will also serve as the glass we see through darkly now – only to see clearly through the light to come.

Be confident in it or not. Believe in it or not. The stage is set. It is our job to know that the only path is the one away from fear, away from doubt – away from the destructive energy that consumes so many dreams and goals.

Steadily Stronger

One can get lost in the “news” vitriol – or one can rise above and see beyond.

One can cower or one can stand. Investors can let the darkness wash away the benefits brewing beyond the squall lines – or they can strengthen their confidence in the downpours and focus on the long game –

…that we always,

no matter what –



Those willing to shed the blanket of fear-driven media hype and hatred will tear through that facade and be better for it as 2021 and beyond dawns.

Of course – more bad things are coming. Good Lord if anyone has been really paying attention, the answer is already clear:

The media machine launched into our lives is off the leash in so many ways, spewing hate and discontent where, in our hearts, none exists in normal life. We all must know that once this bat out of hell is dead and buried, the next monster will make it all look like a walk in the park.

But – It – Won’t – Work

Out of this darkness comes our very best years ahead. Never – forget – that…period.

Inklings of such are in the breadcrumbs all around us.

…read ’em and reap:

The two charts above will likely get almost no attention as the election and pandemic vitriol runs on awhile longer. The markets are ignoring both – as we have suggested for months now.

Recently, they have forged – steadily – an even larger statement about the complex but complete remaking of the corporate landscape ahead.

A new DOW Theory buy signal – and the very early stages of a brand new bull market. When all around you seems nutty, dark and beaten – yet the capital markets are working smoothly, are liquid and driving prices higher, pay attention.

It is not about what’s now – it is about what’s next.

Yes ugly times will still dwarf the path ahead. Yes, darkness will seem to prevail often. After trekking up this mountain for 38+ years – know this: the last two sentences were the identical realities when I first began – in the summer of 1982 – at DOW 950.

Pray for a correction.

Back to the two charts above of the Dow Transports and Industrials. All breakouts tend to get tested so don’t fret when we get hit with a bout of weakness or fears in the weeks ahead and likely test these breakout areas. It will indeed be perfectly normal – and oddly – healthy.

Repeat: you do not want markets to always feel good and just go up.

These Markets?

Well, they are not just going up for drill.

The latest GDP data – released quietly just before the Holiday – showed why in the Calafia charts below:

Capital goods orders have increased meaningfully in recent months in the image data above.

For almost all of us, this counts as more than a V-shaped recovery since it is a very important – and leading – predictor of future economic strength.

The image above tells us that Cap Goods orders are flowing along just fine as the kids are just starting to move out and move on. A few years late, yes – but moving up just the same. Expect that lull in family formations to quickly equalize into 2022-23 and beyond as more Gen Y kids buy their first homes.

The Virus coverage and lockdown would lead one to believe it was Armageddon to our future.

No – it wasn’t – so read on:

While it will most assuredly feel shocking to many – Wednesday’s release of updated GDP data for Q3 brought with it some very welcome news:

√ Corporate profits have surged as the remake unfolds.

The data above show corporate profits have completely recovered to their previous highs, and remain very strong relative to GDP.

Please do not underestimate the powerful macro forces unfolding for our collective benefits. They are doing so in the shadows of the virus and political vitriol. Do not be swayed.

This provides good fundamental support for the current level of equity prices…so again, pray for a correction.

The references to a rocket-ship ride for the 2020s and 2030s are real. The images for the title today above and the one below are from the latest SpaceX launch to the space station.

√ The image at the top of the note this morning is the thrust from the most powerful rocket built by man.

√ It is a beginning analogy of the early strength igniting under the US economy for 2021-22 and beyond…

The kids running SpaceX (average age under 30) would rightfully tell you, “Stand back friends – you ain’t seen nothin’ yet.”

√ A completely new world is ahead. Scary? You bet.

√ But, frighteningly full of immense opportunity – nonetheless.

So Happy Holiday Kick-off Weekend!

I am going to leave a few images in below as reminders from the earlier send this week – just in case it was missed.

This chart below is worth a 2nd, 3rd, 4th and 10th look.

Burn its’ lesson into your brainstem for the next time you are terrified out of your wits – and be assured, you will be, as we continue the trek up this mountain together:

So Now…Another Lesson

You have often heard these notes echo themes.

Imagine that – me being repetitive. Good Lord.

Anyway – one of those themes has been the weakness we all have embedded in our psyches. Emotions. They come to the game at the very worst of times. They arrive ill-prepared for effective decision-making in times of great stress. They cause the most expensive mistakes known to any investor – over time.

Often, it is hard to show that “effect” – but now, thanks to tech – we can – sort of. Bear with me and let’s review together.

Take serious note of the data in the image above. It makes two assumptions – for every day – going back to the end of 1992. Here are those two assumptions:

a) in the green line, one bought the close of the S&P 500 every single day – and then sold on the very next opening tick.

b) in the red line, the same trader’s darker half bought the opening price – every single day – and then sold on the closing tick of the same day.

The green line results – well – shatter those of the red line actions. Indeed, the data are not even. We could argue they are not even in the same city – much less the same ballpark.

What is the difference?

–>>>> News…or worse – one’s reaction to it.

You see – in the night hours, you are sleeping. It is very difficult to react to or do battle with your worst enemy (your emotions) when you are not paying attention to the garbage – sorry – uhhh – news.

It is highly unlikely that green line trader sat up all night and reacted to every piece of news that came down the ticker. Indeed, it is vastly more likely that they ignored the news – and slept instead.

On the other hand, those in the heat of the battle “during trading hours”, were defeated in their assumptions, reactions, timing and opinion-searching over and over and over again.

Over the “long haul”, the record is miserable…and sadly, also supports this long-standing reality below…it is inward lurking – not outward:

So – let’s focus again on the red and green lines. How does one capture the benefit of the green overtime?

Simple – don’t do what the red line data tracks.

By default – you end up “in the green” as they say.


Simple? Ha ha – not on your life.

It means taking all the crap – and staying on your pathway through the good as well as perilous times. Your emotions will not guide you through the storm. We all suffer weaknesses. Our job is to help clients not do battle with their greatest weaknesses. Don’t fret – we all have them. We just have to focus on this:

The underlying current of massive strength and benefit headed our way…

…and NOT the waves in all the storms that will most assuredly cross our path on the journey.

Give Thanks my friends…we will get through this because that is what we do.

√ The sun’s rays are just over the horizon.

√ While many will let fear and worry take them off their rightful rewarding pathway ahead, over the long haul, we can be confident that what is headed our way are our best decades.

In Summary

It’s the kick off to the Holidays. We send you and yours our best and are grateful to serve.

Thank You.

Don’t fret…stand tall in the storm – and look forward, above the noise – not back and into the fog-shrouded dust heap of the past.

This rocket-ship ride is just getting fueled up for the trip – even now in the midst of all of this…we are set for collective good years together like none in history – no matter the politics of it all.

Long-term investors have learned that when all of the above ingredients are baked into the pie, the road ahead has been marked by a clear and resounding message:

…surprises to the upside.

It is our job to withstand the assured storms ahead and be disciplined in our planning for clients’ goals.

Sure, more choppy waters are likely as the future unfolds.

The media will do their best to knock you off your focus, grabbing at your fears, stabbing at the ghosts in the back of one’s mind and working to take you off your pathway.

Focus your mind on rising above this tension and angst instead – as we all succeed together…

It is set in stone with The Barbell Economy®…whether one buys into it – or not.

Pull your seatbelt tighter and hold on to your popcorn.

Exciting things are dead ahead.

Enjoy Your Holiday Kick-Off Weekend

Please Stay Safe & Healthy

We are here to help always, even if just to talk.

Until we see you again, may your journey be grand – and your legacy significant.