One such instance of this is the money supply. You have undoubtedly heard we are printing money faster than superman can catch a speeding bullet. Indeed, we are. But, and this is a very important but, the "scales" we use to measure the money supply was created around 1918, as are the same scales used today. Those scales say the money supply is out of control and we are about to crash and burn the US dollar! The challenge, or distortion, comes in the wake to the 30‐day time period discussed earlier as the Federal Reserve executed many first‐time changes. As a result, we are using the same scales, but we are weighing different things. It would be similar to getting weighed, stepping off and getting a bag of rocks to throw on your shoulders and then getting weighed again and comparing the results. We would be reacting to bad data and that is exactly what we are doing in the economic world right now.

This is one of what I believe to be many distortions occurring right now. You have a "framework" for decision making that comes from years of past experience, beliefs and attitudes that you use to judge where we are right now. That is natural, understandable, and somewhat obvious. The academic and professional asset management world is doing the same thing. They spend years in school studying and developing a "framework" of economic issues - "if this, then this" type situations. When things that never change suddenly change, wrong conclusions can be drawn. My concern - among many - is how many other economic data points we depend on are currently being distorted?

If we give a well-trained economist a scenario with two components of economic change, we should get a reasonable answer - I know you are laughing but work with me here - as to the outcome. They use their "framework" to reach that conclusion. The challenge is that things are so extreme right now, that the U.S. isn't only watching two things change but 20, and the same is occurring around the world - many places of which are in far worse shape than we are. No one alive - including yours truly - can tell you what will happen with all of these things in action. To make matters worse, the "framework" that we use to measure the potential changes has been distorted by game changing governmental maneuvers.

We are accustomed to economists getting it wrong and joke frequently about this, but suddenly this is far from a laughing matter. The expectations for the economy, the market and the world economy are across the board from the largest surge in commodity prices in history to a global depression surpassing that of the "Great Depression" in the 1930s. How can so many be so far apart - some see no distortions, some see some distortions, and there maybe somebody who has seen them all but we won't know who that was for years to come. There will be economists absolutely right and deadly wrong as measured by asset prices in the future, as that is the only measuring stick most of us have to use. What we will never know is if the outcome and glory or doom they receive will be based on perceived results or actual computations that played out as they expected.

The market has humbled everyone who held anything but cash lately - yes, gold is off near 10 percent this year as well. If you bought anything in 2008 it was generally wrong, unless you were willing to take profits almost immediately. If you failed to keep anything that you previously held and didn't sell it, you were wrong! Cash won the battle for 2008 and of course the long U.S. bond, if you sold it in December!

We believe that there are distortions causing a serious deviation from proper pricing and we are starting to find those who agree with us and using big money to cast their vote. Last year every sector within the S&P 500 fell in price and we had more than 60 percent of all the companies in the S&P 500 making new 52‐week lows at the then November lows. The current low now has less than 20 percent of the companies in the same boat. Companies that seem to have the strength are seeing their prices hold up and the others, as well as the market indices, continue to fall. We deeply believe there are companies worthy of buying based on the facts we have today and others that simply have to be sold.

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