1. Pioneered Value Investing: Benjamin Grahamâs focus on intrinsic value reshaped investing, emphasizing fundamentals over speculation.
2. Mentor to Buffett: His teachings influenced Warren Buffett, the most successful investor ever, extending Grahamâs legacy.
3. Reshaped Capital Markets: Grahamâs methods brought discipline and long-term thinking to global markets.
4. Stabilizing Force: His conservative strategies helped investors navigate financial crises with a margin of safety.
5. Improved Corporate Governance: His focus on accountability pushed companies toward greater transparency.
6. Enduring Education: His work remains foundational in investment education, shaping future leaders.
7. Psychological Insight: Grahamâs understanding of market psychology helped investors avoid emotional mistakes.
Itâs not half, or even 30% of the population that could be considered extreme âliberalâ ideologues. Itâs more likely around 6%, with perhaps another 18% following their lead. However, they hold a disproportionate amount of power and influence.
I decided to grow a beard, but after two weeks, I looked less like a rugged woodsman and more like a patchy 14-year-old trying to sneak into a bar.
As Bitcoinâs value surged, a significant portion of the financial establishment, once dismissive, began to embrace its potential. Paul Tudor Jones, a highly respected hedge fund manager, was among the first to declare Bitcoin a âlegitimate store of value,â likening it to digital gold. This comparison is telling. Gold, with its long history of being a hedge against inflation, has become a go-to asset during times of economic uncertainty. Jonesâ assertion hinted at Bitcoinâs increasing role in that capacityâan asset not just for speculation but as a safeguard against the depreciation of fiat currencies in inflationary environments.
Major financial institutions began to follow suit. Fidelity Investments, a bastion of traditional asset management, established a dedicated arm for cryptocurrency, signaling a paradigm shift. This wasnât about chasing the latest trendâit was about recognizing Bitcoinâs structural potential in modern portfolios. Fidelityâs move reflected a broader institutional acknowledgment that digital assets, particularly Bitcoin, held significant promise for long-term value preservation, even as legacy assets like real estate continued to struggle with liquidity and market unpredictability.
Then came Goldman Sachs, whose cryptocurrency trading desk was another stark indicator that Bitcoin was shedding its fringe status. Their foray into digital assets underscored a strategic understanding: Bitcoin, with its 24/7 liquidity and global accessibility, offers a flexibility that real estate, with its significant entry and exit barriers, simply cannot match. For institutional players, Bitcoinâs liquidity enables faster portfolio rebalancing and risk management, a critical advantage over real estateâs sluggish transactional process.
BlackRock, the worldâs largest asset manager, integrated Bitcoin into its investment frameworks, with CEO Larry Fink remarking on its potential as a âglobal market asset.â This endorsement from the titan of asset management reflects a recognition of Bitcoinâs value as a decentralized, non-sovereign asset. Finkâs reference to Bitcoin as a âglobal market assetâ highlights a deeper structural shiftâBitcoinâs appeal lies in its decoupling from national economies, making it less vulnerable to localized political and economic disruptions that frequently impact real estate.
In contrast to real estateâs immobility, Bill Miller, a renowned investor, noted that Bitcoin was akin to a portable form of wealth that could be transferred across borders without government intervention or traditional capital controls. Real estate, while a robust long-term investment, remains tethered to its physical location. Bitcoinâs sovereignty, however, offers unparalleled flexibility, especially in a world where governments increasingly look to tax and regulate physical assets. Millerâs recognition of Bitcoinâs ability to be moved without restrictions points to a future where financial sovereignty becomes paramount to wealth protection.
Grayscale Investments further amplified this institutional acceptance by creating pathways for both small and large investors to access Bitcoin through its trusts. This move democratized Bitcoin ownership, reinforcing its divisibility advantage. Real estate, with its high upfront capital requirements, cannot compete with Bitcoinâs fractional ownership model. For wealth accumulation, particularly in uncertain markets, the ability to invest incrementally, as opposed to needing significant capital outlays for real estate, represents a powerful tool for broader wealth distribution.
Meanwhile, Ray Dalio, founder of Bridgewater Associates, the worldâs largest hedge fund, began to rethink his stance on Bitcoin, stating that it had âproven itselfâ as a valuable asset. Dalioâs acknowledgment is pivotal, especially given his long-held belief in the importance of gold and real estate as hedges against economic instability. His shift toward Bitcoin suggests a recognition that real estateâs appeal, particularly in its ability to store value, may be waning in comparison to Bitcoinâs non-correlated performance and superior global liquidity.
The endorsement of Stanley Druckenmiller, another titan of hedge fund management, further solidified Bitcoinâs standing. Druckenmiller, once a skeptic, admitted that Bitcoin might surpass gold in terms of performance, given its technological underpinnings and scarcity model. While real estate benefits from tangible, physical scarcity, Bitcoinâs 21 million cap introduces a form of digital scarcity that is arguably more predictable and immune to market shocks like oversupply or underdevelopmentâissues that can plague real estate.
What distinguishes Bitcoin in wealth accumulation is not just its portability or liquidity but also its resilience. During the COVID-19 pandemic, as real estate markets faltered and investors faced uncertainties over commercial and residential spaces, Bitcoin thrived. The global crisis underscored the fragility of physical assets in times of economic downturn. Bitcoin, however, operated unhindered by geographical or infrastructural constraints, allowing investors to continue transacting across borders and time zones. Citiâs research highlighted this, positing that Bitcoin could eventually become the preferred currency for international tradeâa role real estate, with its inherent immobility, could never fulfill.
In its 2021 report, Bank of America echoed these sentiments, asserting that Bitcoin had become âtoo large to ignore.â This acknowledgment speaks not just to its price appreciation but to its increasing relevance as a hedge, store of value, and medium of exchangeâroles historically reserved for assets like gold and real estate.
1. The Early 1970s: Nixon Shock and Oil Crisis
In 1971, President Nixon took the U.S. off the gold standard, ending the Bretton Woods system and effectively leading to the current fiat currency system. The ensuing Nixon Shock caused inflation, contributing to economic turbulence throughout the 1970s. This period also saw the first oil crisis (1973), which resulted in a severe stock market decline. However, the long-term resilience of the S&P 500 is clear as it recovered following these shocks.
2. Late 1970s to Early 1980s: Stagflation and Monetary Policy
The chart shows continued volatility due to stagflation, a mix of high inflation and stagnating growth, leading to policy shifts under the Federal Reserve. The appointment of Paul Volcker as Fed Chair in 1979 is pivotal, as he implemented high-interest rates to curb inflation. This decision resulted in a recession but stabilized inflation and set the stage for a bull market in the 1980s.
3. Reaganomics and the Bull Market of the 1980s
Reaganâs policies, including tax cuts and deregulation, contributed to the rapid economic expansion reflected in the S&P 500âs growth. However, the period also saw Black Monday in 1987, the largest single-day percentage decline in the S&P 500âs history. Despite this, the overall trend in the 1980s remained upwards, fueled by strong fiscal policies and continued deregulation.
4. 1990s: Technology Boom and Globalization
The collapse of the Soviet Union and the subsequent end of the Cold War fostered an era of globalized trade, allowing corporations to expand and generate higher returns, as reflected in the marketâs growth. Additionally, the advent of the internet and technology boom in the late 1990s culminated in the Dot-com Bubble. Although the bubble burst in 2000, leading to a sharp correction, the long-term trajectory remained upward.
5. 2000s: 9/11 and the Housing Bubble
The 9/11 attacks in 2001 and the subsequent U.S. invasion of Iraq brought economic uncertainty, but the market bounced back by mid-decade. However, this recovery was built on shaky foundations as the housing bubble formed due to loose lending standards and speculative real estate investments. This culminated in the 2008 Global Financial Crisis, which had a profound impact on the S&P 500, as reflected in the sharp dip during that period. Lehman Brothersâ collapse and the governmentâs response via TARP (Troubled Asset Relief Program) and Fed monetary easing prevented a deeper collapse.
6. 2010s: Monetary Stimulus and Market Growth
Following the 2008 crisis, the Federal Reserve implemented historically low interest rates and engaged in quantitative easing, pumping liquidity into the market. This facilitated a decade-long bull market as the S&P 500 soared through the 2010s. Major events included the European debt crisis, but the significant shift was the rise of technology companies, such as Apple and Facebook, which became key drivers of S&P 500 growth.
7. 2020s: Pandemic and Modern Challenges
The chartâs most recent section reflects the COVID-19 pandemic, which caused an initial sharp decline as economies shut down globally. However, massive fiscal and monetary stimulus by governments worldwide led to an unprecedented recovery in the markets. The U.S. government passed several stimulus packages, and the Federal Reserve introduced more aggressive monetary policies to ensure liquidity in the markets. Despite a brief recovery, the period remains challenging, with events like inflationary pressures in 2021-2022 due to supply chain disruptions and post-pandemic reopening, followed by geopolitical tensions such as Russiaâs invasion of Ukraine in 2022.
Nuances and Deeper Observations:
1. Logarithmic Scaling
The use of a logarithmic scale highlights the exponential growth of the S&P 500 index, especially in the latter half of the 20th century. While earlier periods such as the 1970s appear relatively flat, in real terms, these periods involved significant growth, reflecting the power of long-term compounding.
2. Impact of Global Events
One of the most remarkable aspects of the chart is how the market has continuously rebounded from crises, including wars, political upheavals, and financial crashes. For example, despite the 9/11 attacks, the market recovered fairly quickly due to aggressive monetary easing. Similarly, Black Monday, the 1987 stock market crash, caused a massive single-day drop but was followed by one of the longest bull markets in history.
3. Technological Innovation as a Key Driver
The rise of technology companies in the 1990s and 2000s is crucial to understanding the marketâs growth. Companies like Apple, Microsoft, and more recently Facebook (now Meta) and Google, have fundamentally reshaped the economy, contributing disproportionately to the S&P 500âs returns. These companiesâ dominance is tied to their ability to leverage network effects, global scale, and innovation, which are characteristics less prevalent in earlier decades of the index.
4. Monetary Policyâs Role in Market Stability
Central banks, especially the U.S. Federal Reserve, have played a critical role in stabilizing markets during times of crisis. The Volcker Shock of the late 1970s is one of the clearest examples, as the Fed raised interest rates dramatically to curb inflation, setting the stage for economic recovery in the 1980s. Similarly, the Fedâs response to the 2008 financial crisis, through measures such as quantitative easing, allowed for a recovery that extended into the 2010s.
5. Geopolitical Risks and Recovery
Geopolitical events, such as wars, terrorist attacks, and political upheaval, have often created short-term volatility in markets, as seen in reactions to 9/11, the Iraq war, and Russiaâs invasion of Ukraine. However, the long-term trajectory of the market appears largely insulated from these crises, with recoveries typically following government and central bank interventions.
6. The 2020s and Post-Pandemic World
The post-pandemic period presents unique challenges. While the market rebounded quickly due to massive stimulus, it also led to concerns about inflation, rising interest rates, and supply chain disruptions, all of which have the potential to influence market performance in new and unpredictable ways. The latest geopolitical tensions, such as Russiaâs invasion of Ukraine, along with renewed concerns about energy supplies, show that the market continues to face external risks.
If youâre negative youâre realistic; if youâre positive youâre realistic. So you might as well be positive.
Putin LUVVVSSSS Harris and Walz đđđ why wouldnât you want your enemies to destroy themselves
The relationship between the U.S. Dollar Index (DXY) and the S&P 500 is complex and not always inversely correlated. Here is a comprehensive overview of periods when these two indices showed positive correlations:
### Overview of Positive Correlations
1. **General Trends**: Over the past 20 years, there has been a slight positive correlation between the DXY and the S&P 500 about 40% of the time. This means that in these instances, both the value of the U.S. dollar and U.S. stock indices rose simultaneously[1].
2. **Macroeconomic Factors**: Economic growth, inflation, and interest rates can simultaneously impact both the DXY and the S&P 500. For instance, strong economic indicators like robust GDP growth can boost investor confidence, leading to a rise in both the dollar and stock markets[2].
3. **Geopolitical Events**: Political stability and favorable trade agreements can lead to simultaneous increases in the DXY and S&P 500. For example, positive developments in trade negotiations or geopolitical stability can enhance investor sentiment, affecting both indices positively[2].
4. **Central Bank Policies**: Actions by the U.S. Federal Reserve, such as interest rate hikes, can strengthen the dollar while also boosting stock markets if the economic outlook is positive. This can lead to periods of positive correlation between the DXY and S&P 500[2].
### Historical Analysis
- **1980s**: During the early 1980s, both the DXY and U.S. stock markets experienced strength due to high interest rates and economic recovery, leading to a positive correlation.
- **Late 1990s to Early 2000s**: The tech boom saw both the dollar and stock markets rise together, although this correlation was not consistent throughout the entire period.
- **Post-2008 Financial Crisis**: From mid-2008 to early 2014, there were phases where both indices moved in the same direction as the global economy recovered from the crisis[1].
- **2020 Pandemic Recovery**: Initially, both the DXY and stock markets showed some positive correlation as markets stabilized after the initial COVID-19 shock[2].
### Statistical Analysis
To quantify these relationships, analysts use statistical tools like the correlation coefficient, which measures the strength and direction of the linear relationship between two variables. A correlation coefficient close to +1 indicates a strong positive correlation[2].
### Implications for Traders
Understanding these periods of positive correlation can help traders develop strategies that consider both fundamental and technical analysis. By monitoring macroeconomic indicators, geopolitical events, and central bank policies, traders can better anticipate market movements and manage risks[2].
This comprehensive overview highlights the complexity of the relationship between the DXY and S&P 500, emphasizing the need for a nuanced approach when analyzing these indices.
Sources
[1] How U.S. Stock Prices Correlate to the Value of the U.S. Dollar https://www.investopedia.com/ask/answers/06/usdollarcorrelation.asp
[2] Financial Source - Is The DXY Correlated To The S&P500? https://financialsource.co/is-the-dxy-correlated-to-the-sp500/
[3] BIS Quarterly Review, August 2000 https://www.bis.org/publ/r_qt0008e.pdf



