I need a vacation.

I have been working nonstop for decades and desperately need a break. It seems that the older I get, the more I know, and the more in demand I become.

You can tear up your Rolodex card for me, unfriend me on Facebook, designate my email address as SPAM, and block my Twitter account. It won’t do you any good.

If I don’t take some time off, I am going to start raving MAD!

Over the last 16 years, I have worked the hardest in my entire life. And in the last two months, I have had to work with a bullet wound in my hip courtesy of the Russian Army in Ukraine. Whenever I have free time, I go fight a war. That’s who you want calling your trades.

This year, I have brought in a total return of +79.44%, versus +24.32% for the S&P 500, far and away among the best of my life and almost certainly yours as well. If you got half of my performance, you beat virtually everyone else in the industry, even the best hedge funds. In other words, I underpromised and over-delivered….in spades.

If you wonder why I do this, it’s really very simple. Read my inbox and you would burst into tears.

Every day, I learn tales of mortgages paid off, student loans dealt with, college educations financed, and early retirements launched. I am improving lives by the thousands. That’s far better than any hedge fund bonus could offer me, although I wouldn’t mind owning the Golden State Warriors.

At this late stage in my life, the most valuable thing is to be needed and listened to. If that means becoming a cult leader, that’s fine with me. After all, the last guy to try this route got crucified.

This year was challenging, to say the least. It started with a melt-up, then a banking crisis, then a snore, then a melt-up, then the biggest rally of all time, for both stocks and bonds. A $17 gain in (TLT) in a month? Really? I caught every move. We were all forced to become inveterate Fed watchers, much like 40 years ago.

When horrific uncontrollable wildfires broke out in California, I flew volunteer spotter planes for Cal Fire, holding the stick with one hand and a pair of binoculars with the other, looking for trouble and radioing in coordinates, and directing aerial tankers. Nobody can fly wildfires like I can.

I lost access to my Lake Tahoe house when the big fire hit right in the middle of a remodel. All the contractors disappeared chasing much higher-paying insurance work. At least we now have a 20-mile-wide fire break to the southwest of the house.

I have high hopes for next summer, starting with my seminar at sea on an Alaska cruise in June, another Matterhorn climb in July, client visits in Europe for August, flying Spitfires in England in September, and hiking the 170-mile Tahoe Rim Trail in October.

On top of all this, I was on speed dial at the Joint Chiefs and the US Marine Corps. A major? Really? And now I’m a major in two armies, the US and Ukraine. Seems you’re not the only one in desperate need of global macro advice.

The sanctions are working great by the way. Ukraine is winning, but slowly. The best compliment I received this year was when my commander in Ukraine told me I was the bravest man he ever met. I told him all Americans are like me. Whenever I enter the Marines Club in San Francisco, they call me a hero. In a building full of heroes, that is a big deal.

So, I will spend the next two weeks reading the deep research, speaking with old hedge fund buddies, the few still left alive, and trying to come up with a game plan for 2024. One thing is certain: we will likely make more money this year than next, the setup is so clear. We are at the beginning of a bull market that could last five or ten years.

Instead of sending out urgent trade alerts, emergency news flashes, and more research than you can read, I’ll be playing Monopoly and Risk, practicing my banjo, a catching up on some classic films.

I already have one trade-on: I’ll watch Elf for the millionth time if the kids watch Gary Cooper’s 1949 Task Force, The History of Naval Aviation (semper fi).

In the meantime, I’ll be running some of my favorite research pieces from the past over the next two weeks. Hot Tips will include the same.

We have had no snow at Tahoe so far. Pray for snow so I can use my senior season ski pass.

So, everyone please have some great holidays, spend your trading profits well, and get well rested.

We have some serious work to do in 2024.

Merry Christmas and Happy New Year,

John Thomas
CEO and Publisher
The Diary of a Mad Hedge Fund Trader

Selling Christmas Trees for the Boy Scouts

I took a day off to attend the New York Times Global Forum at San Francisco’s Sony Metreon Center.

Their goal was to put together 400 of the most forward-thinking and influential minds in the Bay Area, stand back, and see what happened.

It was organized by my old friend, fellow traveler, and veteran journalist, Tom Friedman.

Tom and I date back to the old days in Beirut, during their vicious civil war in the early eighties, when working as a journalist meant not knowing if you would wake up the next morning.

Tom worked for the old United Press International, and I for the still prospering Economist.

Our mutual friend, the Associated Press’s Terry Anderson, the best man at my wedding, was kidnapped out of his apartment and held hostage by Shiite Hezbollah militants for five years, an ordeal he described in chilling detail in his book, Den of Lions.

You know Tom as the controversial and kibitzing resident of the Times Op-ed page.

He popularized the concepts of globalization and a flat world in a series of groundbreaking, best-selling books, including The Lexus and the Olive Tree, Hot, Flat, and Crowded, and That Used To Be Us.

I managed to speak to dozens of guests and gained a fascinating read from many different viewpoints of our long-term future.

I shall try to distill what I learned in a few lines without any particular attribution. I am always shopping for a new framework with which to view our rapidly evolving planet, and I was not disappointed.

The merger of globalization and information technology has been the most important development of this century. The new hyperconnectivity is changing the world at a breakneck speed that few understand.

In the days of old, you needed an entire country to impact the global economy. Then, only a corporation was required, starting with the Dutch East India Company in the 1600’s. Now, all it takes is a laptop computer or smartphone with a broadband connection.

Several disparate trends came together during the nineties to enable this revolution.

The PC made possible the authoring of content in digital form. The Internet is distributed globally for free. Workflow software allowed the residents of this potential Tower of Babel to seamlessly talk to each other.

Google gave us unlimited free searches, permitting us to all find each other.

A dozen years ago, 5G was a parking space, Skype was a typo, the cloud was in the sky, Twitter was a sound, Facebook didn’t exist, and big data was a rap group.

Today, the collapse of storage costs has ushered in big data and super-empowered innovators. High-speed Internet is even available at the summit of Mount Everest.

If the entire world were a math class, the grading curve would just rise steeply for everyone.

“Average” is officially dead.

When Tom’s predecessor, James Reston, went to the office 30 years ago, he wondered what his seven competitors at the major national newspapers would write that day.

Now Tom wonders what his 70 million competitors will write. He is writing for the readers in Chengdu as much as he is writing for the ones in Chicago.

Employment prospects for kids these days are particularly challenging. They have to be innovation-ready and not job-ready.

In fact, the whole concept of a “job” is rapidly dying out. People have to think like newly landed immigrants: unconnected, hungry, and paranoid, but still optimists.

We need to always be in “beta” mode, endlessly improving our value added to the global economy. The moment you think you’re finished, you are finished.

A lot of people will tell you how to invest your 401k, but no one will tell you how to invest in yourself.

The Diary of a Mad Hedge Fund Trader is one of the few resources that does this, teaching readers how to prosper in the financial markets independent of the establishment.

The US will not cut or spend its way out of the current economic malaise. It will invent its way out. An accelerating rate of innovation will eventually soak up our current excess workers.

America is now the place where everyone around the world comes to launch their moon shot.

That is great for business and explains the tidal wave of new capital pouring into this country.

In the meantime, we need to bolster our safety nets, like Medicare and Social Security, as they will be in much greater demand in this independent world.

I will write more about the conference in the coming days, with carve-outs on specific topics. The outlook for technology is truly unbelievable.

Two Old Warhorses