Which Way Wednesday – 3,700 Fed Edition

Shorting sure does seem pointles, doesn't it?

No matter what the news, the market seems to climb higher and no one seems to notice (or care) that the Dollar continues to get weaker, down almost 5% since September.  That's a 5% Tax on you total net worth thanks to these inept economic policies so when you wonder where all this stimulus money is coming from – it's being extracted from every Dollar you've ever made in your life and every asset you own (if they are Dollar-based).  

The Dollar is down 8% since July and down more than 10% since March while the S&P 500 has climber from 3,100 to 3,700, which is 20% and that makes sense because earnings are priced in Dollars so the weak Dollar gives you a 10% inflated view of earnings and stocks are priced in Dollars, so the weak Dollar gives you a 10% inflated view of the value of the stock.  There's really nothing there – yet people get excited!

Let's say, for example, your mom takes your temperature and it's 98.6 and the temperature outside is 75 degrees.  Later she takes your temperature and it's 37 degrees and the outside temperature is now 24 degrees.  Clearly it's the freezing temperatures that have frozen your body, right?  Or perhaps the first reading was in Fahrenheit and the second was in Celsius?  

That's what we're doing when the Dollar, which is the "constant" we measure value by, drastically changes during the course of a year.  It leads us to get false readings in all of our data and causes us to make false conclusions since the underlying assumption in the markets (and all trading algorithms) is that we have a consistent base of measurement.  This is a huge flaw in the system!

Our last Long-Term Portfolio Review was on November 17th ("Tesla Tuesday – Musk Makes the S&P 500 and our Long-Term Portfolio Review") and, at the time, we were up a whopping 159%, at $1,295,033 for the year (because what hasn't worked this year in a bullish portfolio?) and we decided to cash out many positions.  Fortunately, I have an unadjusted version so we can see how much…
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