“Hello, yes, it’s been a while, not much…how bout you”
Kudos if you get the reference.. So any who, yes “it’s been a while”. Over the last year or so, I’ve taken to getting “the word” out via podcast which thankfully, many if not most of you seem to be watching. I’ve enjoyed the format and many of you have been kind enough to share that you do, as well. Today, however, I thought I’d sit down and pen an old-fashioned year-end letter. Remember when we used to write letters? Some of you may not but for me it was a great way to express myself. Often times at least for me when I’m discussing a difficult or complex subject with someone, I often later regret my choice of words or lament my inability to express myself in the heat of the moment. Thus “the letter”..
Landing The Plane
Yes, another flying metaphor. Let’s face it between politics and COVID the ride over the last year has been nothing if not turbulent. In all of our year end 2019 discussions not once did someone say… “hey man, what if we are faced with a Pandemic and businesses are shuttered for a period of time and then for fun we sprinkle in a nasty Presidential race at the most difficult period of said pandemic?” Nope, not once did anyone ask me how the models we use would hold up in the face of the aforementioned. The good news is of course that the answer is as follows: TERRIBLE, Then pretty good. For a hot minute in March, it sure seemed like things were going to get out of hand. Markets dropped precipitously in March bottoming out just above 18000 on the DOW. This of course was like October of 1987, December of 2018 and basically the whole year of 2008 in so much that it was learning opportunity for all of us. The lesson? You must hang tight in turbulent markets. Like a turbulent flight its best just to relax, take a deep breath, order another Vodka Tonic (just a thought) and prepare for a safe landing. Today as we all know the markets have recovered and as I type the DOW Industrial Average sits somewhere north of 30,000.
It’s Different This Time!
Yes, of course it is? Ok people lets all take a deep breath, whether your team won, lost or something In between, the world….will not end. For a second let’s pretend it does, lets for the 8th time in my career pretend that a Politician is bringing the end of our economic future with his or her inauguration. NOW WHAT? I cannot believe I have to say this again (for some of you this is the 8th time hearing this lecture and so far I am 8 for 8 (take that Ted Williams) but here goes, “Economies tend to happen to presidents….NOT BECAUSE OF THEM”. Pretending I am wrong this time (that’s just silly) what should we do? Corn Seed and Gunpowder? If you think there is a scenario where major DOW type companies: Microsoft, Exxon, Procter & Gamble, Apple, Caterpillar, Amgen, Johnson and Johnson (you get the point) all go out of business and you will have found a place for your money to hide that is unaffected by such a catastrophic event….well, I got some swamp land down in Okeechobee County I’d like to show ya. Folks there is no investment that saves us if the world ends….the world just simply ends. I don’t anticipate the “end of the world’ but then again, nobody does. As has always been the case, patient and thoughtful investing (not trading) have lent themselves to successful outcomes. Success as always is not “outsmarting the market”. Success will always be in my mind thoughtful risk management coupled with returns competitive enough to provide the lifestyle you have all worked so hard for. I will never be comfortable with any other posture. Chasing the fad of the day or your cousin Louie’s “can’t miss” opportunity has repeatedly proven to be a shortcut that is anything but. Most if not all of you have worked a lifetime to get where you are. Your journey was one of patience, discipline and thoughtful wealth accumulation. Nothing in my always cloudy Crystal Ball tells me we should deviate from that formula.
Lastly, let me say how much I appreciate each and everyone of you. Our team has grown to a size I could never have envisioned some 33 years ago. Back in 1987 it was me a phone, cold pizza, dogged determination and a fair amount of stupid luck. Today our practice employs nearly 40 people throughout the state and that is not because of me, it is because of you. Without your trust in us these young folks would not be afforded the opportunity to do what they do. Not only do they serve you and hopefully provide value to your lives, but they learn from you and see the great examples of success, patience and kindness that each of you brings to our practice. I have said many times that I have the greatest job in the world. I am surrounded daily by folks who have done things the right way. Each of you has taught me something and we have suffered setbacks and eventually successes together. Capitalism and Free Markets often get a bad rap but it is my belief that decency, hard work, free markets, honesty and kindness can all live here under one roof. Its not that we are always right, but we never quit trying. Again, I thank you all for the confidence you have placed with us, it is not taken lightly.
My best to all of you during this joyous time and I would be remiss if I didn’t say…….GOOD BYE and GOOD RIDDANCE 2020!