“Give me a lever long enough and a fulcrum on which to place it, and I shall move the world”
- Archimedes; Ancient Greek Mathematician and Inventor; 287 BC - 212 BC.

The Greeks invented leverage more than 2,200 years ago.  Sure, it might have started with “physical” leverage, but it didn’t take long to apply the magic to money.  “Give me enough bank debt and I shall move the world” -- and move it they have.

“Your love keeps lifting me higher
Than I’ve ever been lifted before
So keep it up
Quench my desire
And I’ll be at your side, forever more.” 

- Jackie Wilson; 1967

Some 48 years after reaching number one on the R & B charts in 1967, Wilson’s hit song has made a revival. Oh, you might not hear it on the radio, but the stock market sings it every day to Janet Yellen at the Fed. “Quench my desire” – for endless easy money, “and I’ll be at your side” – well behaved.

Let’s examine these two characters and their relationship.

“The second fiddle. I can get plenty of first violinists, but to find someone who can play the second fiddle with enthusiasm, now that is a problem.”  - Leonard Bernstein; American Composer; 1918-1990.

The genius of your music, Mr. Bernstein, is unique; your challenge is not.

Mr. Bernstein would appreciate Gene Kranz. From his perch in Kennedy Space Center, Kranz headed the team of engineers who controlled each step of Apollo 11. He quietly celebrated on July 20, 1969 when Neil Armstrong stepped onto the moon and into a life of fame. Bernstein would have also admired Allan McLane. When the continental troops needed equipment, he spent down his inheritance. McLane warned George Washington about the suspicious behavior of Benedict Arnold. Despite his contributions, this second fiddle’s likeness neither appears on any U.S. currency nor any Washington D.C. monument.

“Horse racing is animated roulette.”
Roger Kahn; 86; U.S. author.

Forget the Kentucky Derby.  Forget the Preakness. The biggest horse race starts January 1st every year; runs 365 days, and always features the same five horses – cash, bonds, large stocks, small stocks and foreign stocks.  This letter will focus on the history of each of these horses, the current handicapping and reflect on appropriate strategies.