Morning Note: Capitalist-minded readers may enjoy this one…

Well, it’s the last trading day of 2020 — quite the year! We’ll bid it a fond farewell in the upcoming close to our lengthy year-end letter.

Asian equities leaned green overnight, with 10 of the 16 markets we track closing higher.

9 of the 19 European bourses we follow are closed this morning, of the 10 that are open 9 are presently trading lower.

U.S. major averages are leaning just barely red to start the session: Dow’s down 33 points (0.11%), SP500’s flat, Nasdaq’s down 0.04%, Russell 2000’s down 0.19%.

The VIX (SP500 implied volatility) is down 0.83%. VXN (Nasdaq i.v.) is down 0.30%.

Oil futures are down 0.45%, gold’s up 0.26%, silver’s down 0.59%, copper futures are down 0.70% and the ag complex is up 0.75%.

The 10-year treasury is up (yield down) and the dollar is up 0.19%.

Led by ag commodities, banks, oil services, financials and gold, but dragged by Eurozone equities, base metals, silver, emerging market equities and energy, our core portfolio is off 0.08% as I type.

Economically-impacting trends and events of the past few decades seem to have offered the powers that be ample opportunities to quell the essential powers of capitalism.

A number of years ago (during I’m now thinking a less-mellow time of my life) I was inspired by my oldest son’s (a college freshman at the time, clients know him as Nick) econ class experience to vent my then “frustration” on paper. 

In it, however, I did come full circle and recognized that to some, or perhaps to a great, degree, we all may very well be products of our environment.

Here it is in its entirety, and, please, no offense to you wonderful college professor clients (and subscribers) who we’re most proud to work with!

The essay shows up as Day 31 in the little daily devotional I published back in 2013:

Note first: There’s an all-too-common belief in today’s society that capitalism is actually the culprit that explains the ever-growing division among today’s haves and have nots. 

On that I sincerely beg to differ: Quite the opposite, in my view, in fact.

You see, while indeed capitalism is anything but perfect, it is a system where recklessness and foolhardiness fall prey to smart, efficient, market forces.

These past few decades we’ve seen far too much of the direct opposite; government bailing out often-politically-connected failed enterprises whose just demises would’ve otherwise unleashed resources (including human) to be utilized in a far more productive, opportunity-producing, and, thus, society-benefiting manner.


DAY 31: Products of Our Environment 

The measure of one’s intellect is no match for one’s predisposition. 

With bent brow he peers above wire-rimmed spectacles resting near the tip of his nose, his gaze descending upon three dozen young frontal-lobe-underdeveloped college freshmen. 

With blatant contempt for the values that built a great nation and provided him a platform to stand above the impressionable, the pretentious PhD addresses his barely post-adolescent pupils. 

With incomparable eloquence he marvels the lower-classmen. His charge is to teach, his objective to impeach. To impeach a commoner’s allegiance to his country, to a flag dressed in stars and stripes. He exposes capitalism for how he sees it— a system of selfishness, of ruthless abandon, of obscene opulence. There are no subtleties in his reproach. 

He offers up the life of one William Gates, the near-wealthiest man on earth and the product of the dark-sided capitalism. He implores his students to consider his rhetorical query: 

“How can we allow a single human being to earn literally hundreds of millions of dollars in a single year while others toil for a workman’s wage?” 

Lacking sufficient knowledge, or courage, not a student would challenge the pompous professor. 

Later that evening, as my then eighteen-year-old son shared his story, I was amazed to find that I could actually feel my pulse pounding from within my eyeballs. 

While I was fully aware that my offspring would encounter ideologies that wouldn’t always jibe with the teachings of his old man, I was nonetheless taken aback that this econ professor would dare exploit his position to promote his warped ideology. 

I proceeded to equip my son with the obvious retorts, such as, “How can we allow a college professor to knock down six figures when we have kindergarten teachers working their bottoms off for less than half that amount?” 

I was considering how I might personally lambast the conceited collectivist for imposing his personal agenda onto my young son and his classmates when the obvious occurred to me: there was no way I nor anyone else would change this sadly misguided individual’s mind or how he addresses his students. And besides, he’s just an unfortunate product of his environment— perhaps a disciple of one of his own college instructors. 

Challenging him directly or petitioning for his dismissal for pushing his politics would be a profound waste of time and energy. In fact, in a way, I’m kind of glad he’s there. In the case of my son, he’s learning that ignorance is ignorance, even when it’s well-credentialed and dressed in fine eloquence. 

Of course I’ve nothing to worry about; Nick is an independent-thinking, proud-to-be-a-capitalist young man. Either that or he is, in the certain opinion of any passionate socialist, a product of his environment— a disciple of a delusional free-market-capitalist father. And I’m okay with that. 

So I, the capitalist whacko, think the socialist professor is nothing more than an extension of his ideological upbringing, and he would think the same of me. And you know, maybe we’re both right— perhaps we are each, when it comes to our politics, largely products of our environment. 

And to be perfectly honest, while I’m no psychologist, I do believe that to be the case. In fact I’m reasonably certain this condition afflicts virtually all walks of people— and trust me; the measure of one’s intellect is no match for one’s predisposition. Years spent at our nation’s greatest universities can be practically wasted, for when the academic emerges, his insight into the world at large is first and foremost filtered through the political veil that has been engrained into his very being. 

Therefore, in the case of my son’s teacher, again, there’s absolutely no changing his mind. And the same goes for me. There’s absolutely nothing that will change my belief in free-market capitalism.

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