Hi again,

Most investors were under the impression that after October, it would be back to good old days but as I predicted that did not happen. Technically we are in a bear market. A few days ago, 70% of the companies on the S&P 500 were down 20%+. I do not think this is typical bear market which would last at least 12 months.

The Federal Reserve has been increasing interest rates and they are promising to do more in the future. As Martin Zweig used to say in 1980s, “do not fight the Feds”. Already there are signs of the economy weakening and that is not such a bad thing. This might prompt the Feds to go easy on tightening the money supply to avoid future inflation. The Federal Reserve is very afraid of inflation making a comeback.

I wish you a Merry Christmas and a Happy New Year!

Fernando