With inflation still high, preserving the purchasing power of your assets is vitally important — especially if you're in or near retirement.

I've written a lot (a lot!) about inflation-protected savings bonds, or I bonds. Last weekend, I looked at Treasury inflation-protected securities, or TIPS.

Unlike I bonds, TIPS are marketable, so you can buy whenever you have the cash or sell whenever you need to. That also means they've taken a brutal pounding, like most bonds, as interest rates have risen this year — which, in turn, makes them one of the few assets in today's markets that offer reasonable safety at a reasonable price.

For retirees and near-retirees, TIPS are hard to top.

A year ago, I introduced what I called the Hindsight Bias-Buster, a little quiz asking readers to forecast how various investments would perform in 2022.

Here’s what I want you to do now.

Below is the identical survey I sent out a year ago, with two small tweaks.

At the end, I ask whether you were a subscriber to this newsletter in December 2021 and whether you remember filling out the survey then.

If so, I want you to participate in the survey a second time. Try to remember, as accurately as you can, what your original answers were and fill those in. Do not — I repeat, do not! — look up your original responses.

The second tweak: I ask you to give me your word of honor that you didn’t cheat by looking up your answers from last year.

All in all, this exercise couldn’t be simpler.

Please make your best guesses, today, of what your best guesses were a year ago. Ignore what you know about market returns in 2022 and try to rewind your mental clock back to Dec. 14, 2021, when I first sent this survey. I want you to reconstruct your original answers, as best you can, from memory alone.

I will then match your new responses to your old ones to see how close you came to reconstructing them.

What if you are a new subscriber to the newsletter and never saw last year’s survey?

In that case, I want you to make your best guess of what you would have forecast for 2022. Again, try to set aside what you know has happened. Put yourself in a time-travel machine and go back to last December, when you didn’t know but could only guess what 2022 would hold.

I’ll also highlight a few of the best entries, old and new, to see what we all can learn from them.

After you fill out the survey, just hit reply so I can receive your results.

On Dec. 31, 2022, what do you think will be...

...the closing value of the Dow Jones Industrial Average?
_______

...the total return of the S&P 500 for calendar year 2022?
____%

...the yield on the 10-year Treasury note?
____%

...the official U.S. inflation rate (12-month change in Consumer Price Index)?
____%

...the price of bitcoin?
$________

...the price of gold?
$_____ per oz.

...the price of crude oil?
$_____ per barrel

...the best-performing major financial asset?
__________________

Were you a subscriber to this newsletter in December 2021? (Yes or no: _____.) If so, do you remember filling out this quiz? (Yes or no: _____.)

If you filled out this quiz last year, please confirm that you have *not* looked up your original answers by marking an X here: _____

Thank you!

Crypto mania. Meme-stock mania. SPAC-mania. Dot-com mania.

Anytime we see other investors seem to lose their heads, bidding up prices past what we regard as reasonable, we call it a mania. It’s the mindset that produces a bubble.

Mania is an ancient word, rooted in the very essence of what it means to be human. It derives from men, “to think,” used roughly 5,000 years ago by the nomads in Eastern Europe and Western Asia whose vernacular is the ancestor of dozens of modern languages, including English. The same root gives us mind and mental, mantra and mentor, mention and dementia.

The ancient Greek physician Hippocrates used the term “mania” for the delirium and delusions often associated with fevers.

Goddesses known as maniae, spirits of madness and frenzy, haunted the Greek district of Arcadia, occasionally driving passersby insane.

In Plato’s dialogue Phaedrus, from about 370 B.C., Socrates described one form of madness as “a divine gift, and the source of the chiefest blessings granted to men.” That madness (μανικὴ, manike) is “prophecy (μαντικὴ, mantike), which foretells the future and is the noblest of arts,” said Socrates. “The two words, μαντικὴ and μανικὴ, are really the same.”

In Rome, Mania was a minor goddess of the underworld with a peculiar diet: She consumed human heads.

Among the earliest mentions of mania in English is in Sir Thomas Elyot’s Latin-English dictionary, published about two decades before Shakespeare was born:

Elyot probably based his description on The Saturnalia by Macrobius, a chronicler of Roman customs who wrote in the fifth century A.D. During a sporting festival called the Compitalia, an oracle of Apollo said that because the goddess Mania was a personification of the human mind, sacrifices to her should be made “for heads with heads.” The Roman ruler Tarquinius Superbus ordered that young boys be sacrificed and their heads offered to the goddess. Later, Macrobius wrote, parents were allowed to substitute heads of garlic or poppy, saving their sons’ lives.

The term “mania” got a boost from the influential essayist Joseph Addison, who wrote in the London journal, The Tatler, in 1710:

In late 1636 and early 1637, the price of tulip bulbs in the Netherlands had soared at least 12-fold, with single bulbs fetching the price of a modest house or the equivalent of three years' wages for an artisan.

Addison pretends that the Dutch speculation in tulips has infected Britain. He diagnoses his friend with a disease, “Tulippo-Mania,” that Hippocrates couldn’t have known about.

By 1725, people with mental illness confined to London’s Bethlehem Hospital, or “Bedlam,” were often called maniacs.

To me, one image has come to exemplify financial manias. It doesn’t show swarms of brokers on a trading floor, a frenzied mob of desperate buyers or people trampling each other to sell.

It is Rachel Ruysch’s “Bouquet of Flowers,” which the great still-life artist painted in 1708, seven decades after the Dutch tulip bubble burst.

What looks like lush beauty at first blush is, on closer inspection, overripe with decay: The petals are peeling away from the tulips past their prime, the roses are infested with ants, beetles are tunneling through other flowers, the wheat has tipped over from its own weight and flies have begun feeding on the fruit.

This gorgeous painting is a vanitas: a reminder that the treasures of this world are transitory and that no amount of wealth on earth can assure you of a place in heaven.

At the lower right is what you might easily mistake for a butterfly or moth. It is, in fact, a praying mantis — an insect common in Europe but rare in European art.

A priestly soothsayer or diviner in ancient Greece was called a mantis. The praying mantis insect later acquired its common name from its resemblance to a priest whose hands are poised in prayer.

Just as the Roman goddess Mania demanded that boys’ heads be chopped off and offered to her in sacrifice, female praying mantises often devour the heads of males during mating.

Ruysch, whose father was a scientist with a huge natural-history collection, surely knew that mantises bite others' heads off. Memories of the tulip bubble were still raw in the early 1700s, and anyone familiar with Greek or Latin could understand the connection between mantis and mania.

I think Ruysch put this balefully beautiful mantis here as a warning not to fall prey to another mania. The menacing, mournful eyespots on its forewings seem to be watching us as we look at the painting.

We tend to think of a mania as a phase in markets when people have lost their minds, often in amusing ways.

The history of the word, and Ruysch’s beautiful painting, should instead remind investors that the typical mania isn't a game; it's a guillotine.

Click here for a link to the previous pieces in the Wall Street Words series.

This is our last issue for this year. Enjoy the holiday season, and we'll talk again in January. Thank you!

Be well and invest well,

Jason

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The only value of stock forecasters is to make fortune tellers look good.
—Warren Buffett