The S&P 500 Real Earnings for growth by year have generally been accepted to average out to 10 % over a long period of time, usually 10 years, but how many times has the index actually been in a 2% range of this so-called conservative average? The data shows that since 1989 it has been between this 8% to 12% range 5 out of 30 times. Meaning that the market is on average between the 8% to 12% range, 17% of the time for the last 30 years. The market spent 83% of the time outside the range. In the 30-year period, the range of returns went from a maximum of 261.66%(Dec 2009) and a minimum return of — 79.48%(Dec 2008). The fact that these two figures are a year apart is not a coincidence. It is because these figures were reported by the financial media during ‘The Great Recession’ which is known as the ‘2008 Global Financial Crisis’.

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This is my first attempt of expressing what keeps me up at night, but what helps me wake up early in the morning. I know your first thought is that statement is a juxtaposition, what is he trying to say. It is simply my opinion on how the brain works, and how I have managed to change my perspective on life, religion, and friendships. I just want to start by saying you might not agree fully with everything I say or you might be one of those people who does agree with some of my “discoveries”, but does read this with an open mind and does not allow cultural biases to blind you from the truth or better said my truths.

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Let me tell you a short story about the invisible Gardner. The story starts with two explorers who come upon a clearing in the jungle. In the clearing were growing many flowers and many weeds. One explorer says, “Some gardener must tend this plot.” The other disagrees, “There is no gardener.” So, they pitch their tents and patiently wait for the appearance of the gardener. No gardener is ever seen. “But perhaps he is an invisible gardener.” So, they set up a barbed-wire fence. They electrify it.

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For the most part, I have kept my investing side private. I made this choice because over the last two years of investing and trading (mostly forex speculation of which I do not do anymore) there is one thing my partner “Mr. Market” has taught me about the Capital Markets and the Money markets, do not be fooled that you know everything about the market, it always changing and ready to take your money no questions asked. But there is no denying I love playing this game. There is something strangely arousing about skimming through hundreds of pages of annual reports and proxy statements looking for deep value in the so-called “efficient market” just to prove those academics wrong.

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Introduction

2018 has been an interesting year, companies have experienced exponential growth and the economies of many countries have grown or stabilized their GDP’s. Although there are unfortunate cases like that of Venezuela experiencing high rates of inflation caused by corruption and unstable financial infrastructures, companies in many parts of the world have generally done well this year with the likes of Amazon breaking earnings record during the Christmas Holiday. In August Apple became the world’s first trillion-dollar public company as a rise in its share price pushed it past the landmark valuation. This and many other factors pushed the Economy and Capital Markets forward. Though coming to the end of 2018, the results were conflicting making people question what was really going on. This is the aspect I wanted to focus on and discuss. I have summarized some of the research and insights I discovered over the year during my quest for answers and wanted to share my findings in a brief and easy to understand way.

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