SANTA TAKES STOCK

By Daniel Kadlec

To: Employees of North Pole Inc. Re: Our Christmas Inventory Position

We here at North Pole Inc. are timeless, so I've always managed our business for the extremely long term. That means shunning fads, which can be a quick ticket to irrelevance for any enterprise. Sure, I've given in once in a while. But even in years when I indulged people's penchant for pet rocks and Pictionary, I also delivered plenty of Monopoly sets and Barbie dolls, the kind of low-risk, high-return toys that sustain a franchise.

But, alas, even for the timeless, times change. I now believe we confront a force as permanent as Christmas itself. This force compels us to rethink our mission. I speak, of course, of the bull market in stocks. It's no fad. I'm now convinced that the world is in a new age for investments, one in which stocks never go down more than a trifle. Even more glorious, this riskless bull market--it's better than the 1920s!--promises to double or triple the 11%-a-year historic return from stocks, indefinitely. Now that suits an operation, like ours, of mythical proportions.

I know there are elves who believe the Dow Jones industrial average's 70% gain over the past two years will fade like eight-track. To which I say, Get with the program. This bull market is more durable than a Tonka toy. Endlessly rising stocks have become the birthright of everyone under 50. How else will spoiled baby boomers retire in comfort? Even the U.S. government believes. It plans to invest in stocks to fix the coming Social Security funding problem. Could anything so vast and plodding as the government be wrong? And consider that even Fed Chairman Alan Greenspan, the most powerful person in the economy, can't seem to reverse the stampede. Sure, his recent "irrational exuberance" speech knocked the Dow down 144 points. But that much, and more, was tacked back on within 24 hours.

So, dear elves, I am rewriting our business plan. It has served us well for 2,000 years. But the stock market has served our constituents even better for two, and you don't get to be Kriss Kringle by ignoring the obvious. Forget Tickle Me Elmo and Nintendo 64. Starting this year, everyone gets stock. My sleigh will be light as a glider as I whisk around the world dispensing little scraps of paper that get more valuable each day. It's a miracle, really--one befitting this time of year.

One benefit is that we get to leave the actual making of things to others. We add value, like Wall Street, by shuffling paper around the globe. The right people have to get the right stocks. For example, Rudolph will want shares of General Electric to keep his nose glowing. Scrooge and the Grinch can make good use of Westmoreland Coal. For Greenspan's queasy stomach, a lovely basket of biotech stocks. No doubt one of those companies will discover a cure for him in three to five years. And Roberto Alomar, the Baltimore Orioles' sharp-spitting second baseman, gets chewing-tobacco company UST, so he can really leave his mark on the umps.

You get the idea. Now get cracking. And, please, don't try to simplify things with mutual funds. They're not a bad gift idea. It's just that everybody already has them. Season's greetings.