Maria’s Note: Maria Bonaventura here, managing editor of the Diary. To those who celebrate, Merry Christmas!

Today we continue our Christmas trilogy, which Bill originally penned in 2000. If you missed Part 1, “The Ghost of Christmas Past,” catch up here. Then stay tuned for the final installment tomorrow…

“Fezziwig, not Scrooge.”

This was my mother’s advice when I began my business career.

Hard to imagine, but that was already more than two decades ago. We celebrated our 22nd annual Christmas party on Friday evening.

It seemed as though everyone had the same idea for Friday night.

On Mt. Vernon Square, people who were dressed in gowns, tuxedos, suits, and jeans, often carrying shiny, wrapped presents under their arms, made their way to parties.

The Engineers’ Club was lit up with holiday lights… So was the Women’s Club next door. We outdid them. We had so many Christmas lights strung up that the whole city of Baltimore seemed to go dim when we turned on the switch.

And whatever power we didn’t consume in light was promptly converted to decibels. Thom’s blues band entertained us with holiday favorites like “Dead Blind Man’s Christmas Blues” and “Mean Mrs. Santa’s Got Her Claus All Over Me.”

It was not the kind of Christmas music I recalled from my childhood. But we have among our employees Muslims, Hindus, Jews, Kwanzaans, nail-biters, skinheads, and vegetarians. The nice thing about Thom’s band is that it was equally offensive to everyone, which seemed to be in keeping with the spirit of Christmas.

The music was so loud that we couldn’t hear ourselves talk, which was okay inasmuch as we had nothing to say anyway. So we shouted out our holiday greetings and lip-read best wishes for the New Year, as neighbors a block away called the police to complain. The party was a big success.

When I began my business, the bubble du jour was in the gold market, where the price of the yellow metal had just hit its zenith – reaching above $850 an ounce. Just as today, we recall Lenin’s prediction of using gold for the floors of public lavatories, back then, we spoke of using stock certificates to paper the walls of our storage closets. Stocks were beneath contempt.

People were less interested in getting rich than they were in avoiding poverty. They did not dream of becoming millionaires so much as they had nightmares about dying paupers.

In the second year of Jimmy Carter’s presidency, America’s perch on top of the world seemed much more precarious than it does today. It was not at all obvious that the greatest bull market of all time was about to begin.

At that time, stocks yielded more than 6%. But investors wanted neither stocks nor bonds. They wanted hard assets and natural resources. Oil seemed like the investment of the future. Buying Exxon seemed like the “sure thing.” Buying gold seemed like an even greater “sure thing,” for even if the economy collapsed, as was widely predicted, the price of gold would rise as the dollar became worthless.

Stocks generally were viewed as a dying asset class in 1980… one that was given last rites by the classic BusinessWeek cover a couple of years later… the very bottom of the market… “The Death of Equities.”

It was hard not to recall these things as I saw many of my old friends at the party, many of whom you may know, if not in person, by reputation.

Jim Davidson was there. So was Lynn Carpenter. I have known both of them since childhood. We all failed to grow up together. Jim has grown a little more distinguished-looking and a lot richer. But otherwise, I wondered how much had really changed.

Jim and I got together with Mark Hulbert to launch the Hulbert Financial Digest back in 1980. That was the beginning of our publishing business. We were curious about what kind of investment advice really paid off. We thought investors would be, too. Mark Hulbert, a student of philosophy whom Jim had met at Oxford, took up the project with enthusiasm and continued to do it for a quarter of a century.

In 1980, our contrarian instincts told us that gold and natural resources were probably overbought. Doug Casey predicted a bull market in stocks in the early ’80s. Gary North even recommended buying Microsoft in 1986 – an investment that turned out to be the call of the decade.

Still, we were all “gold bugs” at heart. We were convinced that inflation would destroy the dollar, bonds, and the stock market – it was just a matter of time! And maybe it still is.

But over the following 20 years, gold did not rise. Not $100. Not $10. Not $1. Not even a penny. Instead, it fell – in real terms – by about 80%. Thanks to Paul Volcker, the dollar did not move into Weimar-style hyperinflation. Inflation declined.

The federal budget deficit did not fly out of control. It turned into a surplus. Stocks did not die. They enjoyed the greatest growth cycle ever…

And there we were – Christmas, 2000. Richer? Maybe. Wiser? We hoped. Older? Definitely.

“Mishter Bonner,” said one young woman in a red velvet dress late in the evening, slurring her syllables a bit. “I’ve wanted to say this to you for a long time. I love this company. I mean, it’s great.”

She was standing near the fireplace in the front room, with the Christmas lights adding a glow to her cheeks. I had just finished my annual ritualized humiliation. Thom had invited me to join the band. I sang the lead to that Christmas morning classic, “You Can’t Always Get What You Want.” I couldn’t quite remember the words… or the music.

But other than that, I’m sure my performance was smashing.

Holding a drink in her hand, the young woman looked like someone I had seen in a liquor ad. Who was she? I didn’t know. Someone’s wife? Someone’s girlfriend? An employee in the accounting department?

“But y’know something? There’s just one problem…” she went on.

“Oh?” I replied, fezziwiggishly.

“C’mon…” she continued. “I mean, no offence, but this business sucks. Newsletters are gonna be out of business soon. Everybody’s giving away information on the internet. Like, you can get, I mean, like, all you want.”

“Oh, no,” I reminded her. “You can’t always get what you want. And you definitely can’t get all you want of it.”

Then, worried that I had placed an obstacle in her path… a puddle of repartee she couldn’t cross gracefully… I laid down my cape:

“Tell me more…” I said honestly. I wanted her to go on talking. She was talking nonsense, but a man never tires of nonsense from a beautiful woman.

While this was happening, Ebenezer was being set upon, too. But his was no earthly beauty. No beauty at all, in fact.

“Come with me,” said the spirit. “I am the Ghost of Christmas Present. Look upon me. Touch my garment.”

Ebenezer did so and instantly found himself flying through the streets of Baltimore. Even from what seemed like hundreds of feet up in the air, he could hear the music blaring on Mt. Vernon Square. “What a strange time for a rock concert,” he muttered to himself.

Christmas lights were run up the tower of the monument to George Washington, causing the whole square to glisten festively.

But the ghost did not pause. He continued his flight across Charles Street and over to East Baltimore. Finally, he stopped in front of a modest row house.

“What is this?” asked Ebenezer of his guide.

“This is a house.”

“Yes, I can see that,” Ebenezer pursued the issue, “but why are we here?”

“That is for you to answer,” replied the phantom.

Ebenezer looked in the window. It was a very modest house, of the sort you could have bought with a few shares of Cisco in 1999. Now, it would take twice as many shares.

And there was a family… and, yes… he recognized now where they were. This was the house of his old trading partner, Bob. He had not seen Bob in 15 years – not since the two of them split up after their hedge fund went bust.

Poor Bob. He had given up investing altogether and gotten a job at a mining company. Silly bugger, thought Ebenezer. He saved his few pennies and bought gold coins. He probably has hundreds of them buried in the yard. Not worth the trouble of digging them up.

And he could have bought growth stocks!

Bob’s wife and three daughters were talking in the front room. How pretty the girls were. And so full of life.

“Martha,” said Bob’s wife, “Dad will be so glad to see you. We have so much to do to get ready for Christmas. But sit down in front of the fire. It will be so nice… now that you’re here.”

“Oh… there’s Dad’s car,” said another of the girls, with red, curly hair like that of a doll. “Hide, Martha! Let’s surprise him.”

So Martha hid herself, and in came Bob. And there upon his shoulder was his son, Tiny Tim. Alas, he bore a little crutch and had limbs supported by an iron frame.

“Now, where’s our Martha?” asked Bob, looking round.

“Not coming,” said his wife.

“Not coming,” said Bob, with a sudden deflation of his high spirits, “not coming for Christmas?”

Martha didn’t like to see him disappointed, even if only in jest. So she came out from behind the closet door and ran into his open arms. “Oh, there you are! I knew you wouldn’t disappoint us. It wouldn’t be Christmas without you and all the children.”

“And how did little Tim behave in church?” asked Bob’s wife.

“As good as gold,” said Bob, “and better. Somehow, he gets thoughtful, sitting by himself so much, and thinks the strangest things you ever heard. He told me, coming home, that he hoped the people saw him in the church because he was ‘disadvantaged’ and it might be pleasant for them to remember upon Christmas Day who made lame beggars walk and blind men see.”

Ebenezer could barely suppress a “humbug.” For he knew there were advances coming in the biotech and microtech sectors that would cure cripples and blind people. He had seen the IPOs go up by 10 times. It was just a matter of time until all of life’s inconveniences were done away with.

And anyone who cared to could be rich, too – they just had to stop being so stupid and stubborn, like Bob. Get with the program, for Pete’s sake.

The evening dinner progressed with Ebenezer and the ghost watching. The table was set. The whole family seemed in motion. Everybody had something to do… and something to say, well, about everything!

And such merriment!

“A wonderful dinner,” said Bob to his wife. “And the pudding was sensational.”

His wife confessed that she had doubts about the pudding. Even in a low-inflation world, Christmas puddings can be expensive. And, in truth, it was a rather humble pudding, Ebenezer thought, for such a large family. He had seen that much left on the used plates at the Deutsche Bank Alex. Brown party the day before.

But no one said a word to suggest that it was a small pudding. Any member of the family would have blushed to hint at such a thing.

And when it was over, the cider was brought out and passed around. Bob proposed a toast: “A merry Christmas to us all, my dears. God bless us.”

Close by his side sat his son, Tim. Bob held his son’s withered hand in his, as if he feared the boy might be taken from him.

“Spirit,” said Ebenezer, with an interest he had never before felt. “Tell me if the boy will live.” Even with all the advances of medical science, Ebenezer somehow sensed the answer was by no means certain.

“I see a vacant seat,” replied the ghost, “in the poor chimney corner. And a crutch without an owner. If these shadows remain unaltered by the future, the child will die.”

“Shadows remain unaltered?” It took Ebenezer a few seconds to decipher the shade’s meaning. Then, he took it as a reproach.

His old partner, ruined by bad investments, couldn’t afford to buy his son the care he needed. Was he, Ebenezer, who had no responsibility in the matter, supposed to take it upon himself? And why hadn’t the government come to his aid? 

“With all the taxes I’ve paid over the years,” Ebenezer kvetched silently, “you’d think they’d at least take care of one little gimpy kid.”

By the time the Ghost of Christmas Present left Ebenezer, our own Christmas party was coming to a close. The guests were leaving, one by one, and in small groups. Arm in arm, many of them made their way up to the top floor of the nearby Belvedere Hotel, where they continued to enjoy a night of good cheer – until the good cheer was gone and the night itself was used up.

But I was worn out and retired to my small apartment around midnight. In less than 10 minutes, I was asleep in my bed, with visions, perhaps not of sugar plums, dancing in my head.

Around about 4 a.m., I looked at the clock – my sleep was disturbed. There was a tremendous racket on the steps. What ghosts were these, I wondered?

Tomorrow: The Ghost of Christmas Future…




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