Good morning.

As 2021 winds down, it's worth taking a few minutes to try recalling what you thought it would look like before it started.

Think back to exactly a year ago today. On Dec. 14, 2020, members of the general public got the first Covid-19 shots. That same day, the Electoral College formalized Joe Biden's victory in the presidential election. Congress was still bickering over another stimulus package.

Investors didn't know what to expect. A year ago today, our markets coverage noted, stocks "opened higher on optimism that talks for additional fiscal stimulus are progressing and the rollout of Covid-19 vaccines could help stem the pandemic. But stocks pulled back as the session progressed as investors fretted about the potential for further lockdown measures."

The Dow Jones Industrial Average sagged 184.82 points, or 0.6%, to 29861.55, after rising that morning by 279 points. The S&P 500 slipped 0.4%. The yield on the 10-year U.S. Treasury note fell to 0.891%, down about a percentage point for 2020.

Since then, the Dow has risen more than 19%, and the S&P 500 has gained almost 30%. Over the next three months alone, the yield on the 10-year Treasury almost doubled, and it still remains substantially higher than it was a year ago:

Do yourself a favor. Between now and the end of 2021, fill out this little quiz of mine, which I call the Hindsight Bias-Buster.

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?
__________________

Print this out, or write your answers down someplace where you can't lose them.

Or, if you want me to see your answers, just copy and paste them into a reply email and send it along! I'll write about this exercise again at the end of next year. And, who knows, you might just turn out to be the only reader who aced every single answer. In that case, I'll put your name in lights for sure.

If you live outside the U.S., just substitute the relevant measures from your nation's markets and economy.

In any case, a year from now, you will almost certainly find yourself exclaiming, "I knew that would happen!" over some outcome in the markets. Just look back at your Hindsight Bias-Buster to see what you actually thought, and you might realize you didn't.

This kind of exercise is an honest look in the mirror that can help you keep your expectations realistic and deter you from making big bets on shaky little hunches.

Good luck!

My latest column was about Wilmot Kidd, the remarkable head of Central Securities Corp., a closed-end fund whose record over the past 20 years is better than Warren Buffett's — and which has outperformed the S&P 500 for substantial margins over periods as long as a half-century.

He's about to retire, but Mr. Kidd's success stems from two main sources: extraordinary patience and the courage to stand aside from the herd. He has often held investments for 30 or 40 years. And you can't beat the market by mirroring it, so his portfolio is defiantly different from that of the typical fund: Central owns fewer than three dozen stocks in total and keeps more than half its assets in its top 10 holdings — many of which are owned by few, if any, other funds.

You can read about him here.

On Dec. 16, 1685, Wall Street was laid out at the northernmost edge of the colonial settlement of Manhattan. A surveyor named Leo Beckwith trudged through the mud and manure to mark the course of a roadbed that would run right along the defensive wall of the little town.

The wall that gave its name to Wall Street had originally been only some fenceposts pounded into the muck, but in the mid-17th century the Dutch settlers had turned it into a serious military earthworks as a defensive line against a British attack:

After 1664, the British took over the former Dutch outpost. By 1685, they were finally getting around to neatening things up a bit:

(In 1752, Britain and its colonies moved from the Julian to the Gregorian calendar, shifting dates 11 days forward. It isn't clear whether Stedman and other early sources account for that change when they cite the date of Dec. 16, 1685, but Wall Street was laid out this month in either calendar.)

In this early photograph, taken from the waterfront along the East River around the time of the Civil War, we are looking west along the whole expanse of Wall Street. Jay Gould or Cornelius Vanderbilt could be lurking somewhere in those shadows, ready to destroy anyone daft enough to take the other side of a trade. The original wall would have run along the north edge of the street, to the right in the photograph. The spire of Trinity Church rises at the far end:

This photo perfectly captures the beautiful opening of Fred Schwed Jr.'s classic 1940 book on investing, Where Are the Customers' Yachts?

"Wall Street," reads the sinister old gag, "is a street with a river at one end and a graveyard at the other."

This is striking, but incomplete. It omits the kindergarten in the middle.

A riddle I heard when I first became a financial reporter decades ago went like this:

Q: The wall that Wall Street was named after was originally built to keep out armed raiders and marauding wild pigs. How did it succeed and how did it fail?

A: It kept out the raiders, but not the pigs.

When The Wall Street Journal printed its first issue, on July 8, 1889, it wasn't even based on Wall Street; the publisher, Dow, Jones & Co., had its offices a stone's throw away at 26 Broad Street.

And many of Wall Street's banks and brokerages, even then, were headquartered on other streets nearby in downtown Manhattan:

But the term "Wall Street" had long since come to mean a neighborhood, the financial district, a way of making a living and a way of looking at the world.

Today, almost no major financial firms are based on Wall Street, but it still stands for the capital markets and the people who work in them — and probably always will.

This newsletter launched in earnest on March 31, 2020, in the grim dawn of the pandemic. I wrote then:

With markets in turmoil and millions in social isolation, it’s more important than ever for us to feel we belong to a community of like-minded investors devoted to staying the course, tuning out the noise and separating reason from nonsense.

As I’ve often written, successful investing depends on good mental and social hygiene: keeping your mind free of bad information and associating with investors whose philosophies you share.

So please consider this first newsletter the beginning of an intellectual friendship. And please don’t consider it my newsletter, but ours. The more you participate by sharing your thoughts and questions, the better — and the closer a community we can build. (You should also feel free, at any time, to disagree with me! That’s part of a community, too.)

If you'd asked me then what its maximum readership might be someday, I think I would have shrugged and said, "I don't know? Like, maybe, 50,000?" But my voice would have gone up an octave, because saying that number would have scared me.

A few weeks ago, we surpassed 200,000 subscribers. I am grateful to each one of you for letting me take a few minutes of your time each week — and for the wit, the fun and the ideas you share in return.

You have sent me your book recommendations, your favorite paintings, photos of your gardens, messages from your children and grandchildren, and profound insights into your philosophies of investing and life.

It is obvious that you are calm and wise, disciplined, skeptical and independent — the prerequisites for being an intelligent investor, as Benjamin Graham defined it in the book after which this newsletter is named.

Getting to spend some time with people like you is one of the best parts of my job.

This will be our last issue for 2021, as I'm taking a little downtime at year end.

My thanks to all of you!

May the shortest days of the year nevertheless be the warmest and most comforting for you, and I hope 2022 brings wonderful and even brighter days for us all.

Be well and invest well,

Jason

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Not knowing what other people are thinking is not the cause of much human misery, but failing to understand the workings of one’s own mind is bound to lead to unhappiness.
—Marcus Aurelius