Third Quarter 2020 Investment Perspective

October 2020
Quarterly Updates

Our Focus is on the Absolute

Our Investment Goal, as stated, is to deliver positive absolute returns over time by owning what we believe are good businesses, growing the earnings and cash flow stream yearly, and attaching ourselves to this stream at what we think is an attractive valuation.

Last year, absolute net returns increased 37%, a well above average year by any measure.  At the start of this year (feels like a long time ago), absolute net- returns bounded further, up almost another 6% year-to-date as of February 20th.

Then COVID-19 hit.  Our portfolio swung to being down roughly 35% on a year-to-date basis as of March 23rd.

As I wrote a week later in our “Once in a Lifetime” thought piece: “The global COVID-19 Pandemic is truly a once in a lifetime event. I have experienced much in my 38-year investment career…We have not experienced anything like this.”

Our portfolios have historically been recession resistant.  That is, to industrial recessions!  Pandemics are a different story.  Whereas recessions are traditionally led by manufacturing and industrial downturns, the pandemic severely hit the service and consumer economy.  People simply stopped showing up.

We have taken a three-step approach in terms of assessing and addressing the Pandemic and your portfolio:

To read more, download the full Third Quarter 2020 Investment Perspective.