Investment Philosophy

How can something cost less than $0?

That’s the question many people have been asking this week.  It all started on Monday, April 20, when headlines like this dominated the news:

U.S. Oil Prices Fall Below Zero For the First Time in History¹

That same day, plummeting oil took the stock market down with it – the Dow, for example, slid nearly 600 points.²  And while oil prices have risen since Monday, they are still in historically low territory.  The questions, then, are obvious: why are oil prices crashing?  How can they be less than $0?  What does that mean for the stock market?  And what does that mean for us at the pump?

I’ll answer those questions now.

Q: Why has the price of oil dropped so much lately?

First, let’s define what it is we’re actually talking about here. 

Generally speaking, when you hear about oil prices in the media, you’re hearing about the price of crude oil.  Crude oil is raw, unrefined petroleum extracted from the earth.  After extraction, it can then be refined into various products – gasoline being the most well-known.

Historically, oil prices are tied to two different benchmarks: Brent Crude, and West Texas Intermediate (WTI).  Brent is extracted from the North Sea in Europe; WTI from – you guessed it – western Texas.  There are many types of crude oil, but their prices usually follow the price of Brent and WTI, simply because that makes it easier for buyers and sellers to do business.  That means as these two benchmarks go, so goes the rest of the oil industry.

The price of both Brent and WTI have dropped dramatically in recent months, although the news about oil falling below zero is specific to WTI.  (We’ll get to that in a minute.)

There are many reasons why oil prices fluctuate, but they all come back to one: The Law of Supply and Demand.  When the demand for oil is greater than the supply, the price rises.  Conversely, when the supply of oil is greater than the demand for it, the price drops.  This is essentially what’s happening now.  Due to the coronavirus, the world’s appetite for oil is at an all-time low.  Right now, planes aren’t flying, because people aren’t traveling.  Cars aren’t driving as much, because more people are staying home.  Fewer goods are being transported, which means fewer factories are operating.

In short, the world has more of the black stuff than it needs right now.

Sometimes, nations can influence the price of oil by either increasing or decreasing the production of oil.  For example, earlier in April, countries like Saudi Arabia and Russia pledged to cut production by 9.7 million barrels per day. ³  The hope is that by decreasing supply, prices will stabilize.  And they did.  Briefly.

There are two problems here.  The first problem is that the world’s demand for oil is still far, far below that.  In fact, some experts calculate that demand has fallen by 25-35 million barrels per day.³  Think about that number for a moment.  It’s staggering.  So, despite the production cuts, supply will still outpace demand – by a lot.

For the second problem, let’s move on to the next question:

Q: How can oil prices drop below $0? 

Chances are, you have never gone into a store and seen something worth negative dollars.  Just typing the phrase “negative dollars” seems only slightly less crazy than if I had typed, “the sun rose in the west today.”  Nevertheless, the price of West Texas Intermediate did drop below $0 a barrel.  Now, I’ll tell you why.  Bear with me, though, because this is where things get a little tricky.

When it comes to selling oil, there are actually two different markets: the physical market, and the futures market.  The physical market is similar to the way most of us buy and sell things.  A producer, say, Exxon Mobil, sells its oil – usually via an intermediary – to a buyer, like a refinery.  They agree upon a price, the oil is shipped, and that’s that.  This mostly takes place out of the public eye, and it’s not what we’re talking about here.

When you hear the media talk about oil prices, they’re usually discussing the futures market.  This is where futures contracts are traded between brokers, banks, and other entities.  An oil futures contract is for 1,000 barrels of crude, set to be delivered for a specific price at a specific date in the future.  Both buyers and sellers find them handy because the contracts enable them to lock in current prices.

For example, let’s say Bob wants to buy oil from Betty.  If Bob purchases a futures contract at $20 per barrel, and oil prices rise to $21 between the time he bought the contract and when the oil is delivered, he just saved money.  ($1,000, in fact, as that $1 change is multiplied by 1,000 barrels.)  On the other hand, if oil prices fall, then Betty, the seller, will receive more money than if she had sold later.  Either way, producers use future contracts to guarantee they can sell their crude at a later date, no matter what happens.  Buyers who need crude for their own business – like refineries, for example – use them to ensure they have adequate supplies in the future, at a price they can afford.

Make sense?  Good.  Now, let’s throw in a slight twist in the form of speculators. 

Many traders in the oil futures market are speculators.  These traders have no desire to physically own oil any more than you do.  Instead, they make money by betting – speculating – on whether oil prices will go up or down.  (To do this, they simply close their positions before the contract expires by swapping contracts with buyers who actually need it.)

So, now that you understand how things work, here’s what happened.  The contracts for WTI crude set for delivery in May expired on Tuesday, April 20.  (That means Tuesday was the last day these May contracts could be traded.)  Normally, traders who don’t want to take possession of oil treat the last few days as a chance to swap contracts with buyers who do.  In the meantime, crude set for final delivery in May is stored at facilities in Cushing, Oklahoma, and the entire process is usually neat and orderly.

But this was when traders ran into the second problem I alluded to above.  Thanks to overwhelming supply and underwhelming demand, oil prices had already plummeted.  But now there was a new problem: storage.  Simply put, the world is running out of space to store all this excess oil – and Cushing is projected to be at 100% capacity in mid-May!⁴  As a result, all these traders with May contracts faced the proposition of taking possession of millions of barrels of crude –with no ability to actually store it.  That led to a fire sale of historic proportions.  With most of the usual buyers not buying, traders with neither the desire nor the ability to actually take the oil had no choice but to pay others to take the barrels off their hands.  The result?  WTI prices fell below zero for the first time in history – because the sellers weren’t actually selling.  They were paying others as much as $37.63 a barrel to take the oil for them.⁵

Whew!  We’ve covered a lot of ground.  Congratulations, because you’ve just completed a crash course in the byzantine world of oil prices.  Let’s end by quickly covering two simpler questions:

Q: How will this affect gas prices?   

The answer: probably not as much as you’d think.

Oil prices and gasoline prices are related but not identical.  Gasoline is made from distilled petroleum, usually with a number of special additives.  It’s sold by different companies than those that extracted the petroleum in the first place.  Gasoline futures are an entirely different type of contract governed by a different set of factors.  Transportation, marketing, and refining costs all contribute to the price.  So do federal and state taxes, the latter of which can vary widely.  And of course, different gas stations can set different prices.  There’s no governing body or set of regulations to follow.

Still, falling oil prices do tend to lead to falling gas prices.  As of Tuesday, April 21, the average price per gallon in the United States was $1.81.⁶  That’s 36 cents lower than a month ago, and more than a dollar cheaper than this time last year.  So, you can expect to pay less at the pump for the time being.  Just don’t expect it to get anywhere near zero!

Q: So how does this affect the stock market? 

Still reeling from the pandemic, oil volatility is the last thing the stock market needs right now.  That’s because falling oil prices make life harder for energy companies.  It can lead to significant layoffs, at a time when unemployment is already skyrocketing.  Nations that are particularly dependent on oil production – Canada comes to mind – may feel the effects even more.  That said, oil prices have been turbulent all year long, so moving forward, much of the economic pain may already be priced into the stock markets.  And with dozens of countries pledging to cut production or prop up the industry, we may see prices stabilize soon.

That said, this is not a problem that’s going to end anytime soon.  (The price of June WTI contracts has fallen recently, too.)  It will likely be months, at best, before demand overtakes supply again.  Storage space is increasingly scarce.  So, this is definitely something we will keep an eye on moving forward.  We will scrutinize your portfolio for any possible weaknesses, and let you know if we feel a change is needed.

We hope you found this analysis interesting.  At the very least, now you can impress your family with your knowledge of how oil futures work!  (I know they’re all just dying to learn.)  In the meantime, let me know if you have any questions.  As this pandemic goes on, always remember that my team and I are here for you.  We are constantly working to keep you on track to your financial goals.

Four Things Others Will Wish They Had Done – That We’re Already Do

As you know, the coronavirus situation continues to hammer the markets.  All over the world, investors large and small are facing a level of uncertainty we haven’t experienced in over a decade.  But I’m proud to say that, based on the conversations I’ve had with you and my other clients, there may be no group of people in the world who are handling this situation better.  The majority of my clients have all told me some variation of the same thing:

“It’s not fun, but I’m not stressing about it too much.  I know the markets will recover eventually.”

In other words, they know that, while what goes up must come down, what goes down will eventually bounce back up.

I was also proud when a client asked me a very simple, but very smart question the other day:

“When this is all over, what will I wish I had done?”

This question really got me thinking.  Investors are bombarded every day with opinions (informed or otherwise), data (informative or misleading), and news (real or fake).  As a result, many investors have panicked.  When the coronavirus pandemic resolves and the markets rebound, what will they wish they had done?

Here are my answers:

1. They’ll wish they had focused on the long-term instead of the short.

Investing, by its very nature, is a long-term activity.  Even people who are close to retirement are still investing for the long-term.  That’s why, while bear markets are uncomfortable, they’re also somewhat overrated.  Markets fall over days, weeks, and sometimes, months.  But history has shown that they rise over the course of years and decades, which is good for us, because we’ll be investing for years to come!

Investors who forget this, who think that what’s happening now will happen always, are falling prey to recency bias.  And that never ends well.

2. They’ll wish they had double-checked our asset allocation before all this started.

Asset allocation – the process of spreading your investments across different asset classes – is one of the most important things an investor can do to balance risk versus reward.  During bear markets, the investors who get burned the most are the ones who “put all their eggs in one basket.”  That’s because they didn’t stop to think what would happen if they let their basket drop.       

Investors who have spread their money across a variety of asset classes – who have truly diversified – know they have plenty of eggs left to cook with.

3. They’ll wish they hadn’t tried to take shortcuts.

Think of the last time you were caught in a traffic jam.  You’re sitting there, idling in traffic, when suddenly, the lane next to you starts to move.  So, you quickly merge into that lane, only to get stuck again.  Meanwhile, the lane you were just in is now moving…and all the cars that were once behind you are now speeding ahead.

Maddening, isn’t it?

When bear markets hit, investors often panic.  Instead of sticking to their long-term strategy, they sell, sell, sell – at a time when everyone is selling.  This means they are selling low.  In other words, they try to change lanes in the middle of a traffic jam.

But again, we’re in this for the long-term.  The road we’re on stretches for miles.  Sometimes, the speed limit is 75 miles per hour.  Sometimes, it’s only 25.  Trying to take shortcuts just leads to longer delays.

4. They’ll wish they had positioned themselves to take advantage of when the markets rebound.

It happened after the Great Depression.  It happened after the stock market crash of ’87. It happened after the dot-com bubble burst.  It happened after the financial crisis of 2008.  It happened after the fourth quarter of 2018.  The markets recovered – and climbed to new heights.

Just as bear markets are inevitable, so too are bull markets.  Investors who don’t think long-term, who try to take shortcuts, who don’t try to balance risk and reward, will not be positioned to take advantage of the next one.  Which means that when this is all over and the markets rebound, when they look over at the lane next to them and see people zooming ahead, they’ll be wishing they had done things differently.

But here’s the good news. When this is all over, we won’t be wishing we had done these things.  Why?  Because we’re already doing them!  So, while headlines probably won’t be pleasant over the next several weeks, we can take comfort in this very simple fact:

When this is all over, we won’t need to look back and regret.  All we’ll need to do is keep looking forward.

No matter what headlines you see over the coming weeks and months, always remember that my team and I are here for you.  We’re here to answer your questions.  We’re here to keep an eye on your money.  We’re here to help you hold to your long-term dreams and plans.  So, if there’s ever anything more we can do, please don’t hesitate to let us know.

Because we’re here.

The Situation

On Thursday, March 5, 2020, the Dow fell 969 points – just the latest in a week of wild swings.¹  While monitoring the situation, a headline caught my eye:

“Dow tumbles nearly 1,000 points again, because stocks can’t figure out coronavirus.”² 

To me, this headline illustrates what the media often gets wrong about investing.  But before we dive into that, let’s review how the coronavirus (COVID-19) is impacting the markets.

A wild week

In terms of pure numbers, the first week of March has been one of the wildest in recent memory.  In fact, the Dow had two of its best days ever on March 2^nd and 4^th…but two of its worst days ever on March 3^rd and 5^th. ²  Writers have been comparing the stock market to a rollercoaster for decades, but this takes the analogy to a whole new level.

It's not hard to understand why.  The coronavirus outbreak – which as of this writing has spread to over 100,000 people, with over 3,400 fatalities – is putting a major crimp on business activities around the world.³  Global supply chains, which are the networks between a company and its suppliers, have been dramatically affected. As a result, some of the world’s largest corporations have warned shareholders that they may not be able to reach their quarterly profit estimates.  Industries like travel and transportation, which depend on the movement of people and goods, have seen business plummet.  This in turn has impacted the energy industry, as less travel and transportation mean less demand for oil.

So.  Coronavirus is definitely taking a toll on global markets.  The question economists are struggling to answer is, “How will coronavirus affect the global economy?” 

Here in the United States, consumer spending is one of the main drivers of our economy.  There have been over two-hundred confirmed cases of COVID-19 thus far.  That’s a small number in the grand scheme of things.  Economists’ concern, though, is that the virus may spread, causing people to stay home and consumer spending to slow dramatically.  Nations with far more cases, like China, South Korea, and Italy, are already seeing slowdowns.  The worst-case scenario, according to some analysts, is that economic growth for 2020 could be cut in half if the virus continues to spread.⁴  Should that happen, some nations may well experience a recession.

The Federal Reserve responds

For weeks, analysts expected the Federal Reserve would act at some point.  That’s exactly what they did on Tuesday, March 3^rd, when the Fed announced they would cut interest rates by 0.5%.⁵  The Fed figured lower interest rates would prompt more spending and lending.  Think of it as giving the economy a dose of Vitamin C.

But the markets fell anyway.

There are a few reasons for this.  While a rate cut was expected, the Fed acted much sooner than many anticipated.  So, rather than prompt enthusiasm, it instead prompted concern.  “If the Fed feels like they have to cut rates to keep the economy going,” the thinking goes, “what does that say about the economy?”

Then, too, there’s only so much that lower interest rates can actually do.  To be frank, the Fed has already spent most of its ammunition on this front.  Interest rates have been low for years and have only gotten lower lately.  Furthermore, interest rates can’t fix global supply chains, or replace lost business.  They won’t fill seats on airlines or keep the machinery running in hard-hit factories.  Nor can they stop coronavirus from spreading.

Viruses are no respecter of borders or laws; they’re certainly no respecter of lower interest rates.

Headline-driven investing

Just typing those words makes me shudder!  Headlines are one of the last things that should drive investing, but that’s where we are right now.  The proof is in what happened on Wednesday, March 4^th.

The night before was Super Tuesday – when fourteen states held presidential primaries.  Joe Biden won most of these states, which buoyed investors, as Biden is seen as more centrist than his main opponent, Bernie Sanders.

What connection does Joe Biden winning have on stocks?  None right now.  It doesn’t change anything about coronavirus.  It won’t magically increase economic activity.  The election itself isn’t for another eight months!  And yet, the markets rose over 1,000 points on the back of that headline…before giving most of it back the very next day when the headlines changed.⁶

Which leads me back to the headline I showed you at the beginning of this letter.

“Dow tumbles nearly 1,000 points again, because stocks can’t figure out coronavirus.” 

Look at those words again: Stocks can’t figure out coronavirus.  Stocks don’t have minds of their own, of course, so my guess is the headline really meant investors can’t figure out coronavirus.

But here’s the thing.  For investors, there’s not much to figure out.

Economists, analysts, and pundits try to divine how today’s news will affect tomorrow.  They create projections to help banks, businesses, and politicians make decisions.  It’s a hard job, there’s no denying.

But no investor can accurately predict how bad the virus will or won’t be.  I’ve seen some commentators make claims about vaccines, or how warm weather will stop the virus in its tracks, or any of a dozen other things.  It’s all speculation.  The fact is, no one knows how long this epidemic will last, or how far it will spread.  No one knows who will win the election in November.  No one knows the future!  We can make educated guesses, but we can’t know with any certainty.  So of course investors can’t “figure out” coronavirus.

Even if we could, the situation would likely change the next day!

To me, the problem with the headline above is that it implies investors should be trying to “figure it out.”  But if we could, there would never be any uncertainty.  Investing would become as predictable as grocery shopping.  But investing doesn’t work like that.  That’s why we don’t make investment decisions based on predictions.  It’s why, during times of market volatility, we don’t chase our own tail, trying to time the markets or make risky bets based on what we guess might happen.

In other words, we don’t need to “figure out” coronavirus.  Let’s leave that to the scientists.  Instead, all we need to do is largely what we’ve already done!  And that is:

1. Determine what kind of investment return you need to reach your goals, and then choose high-quality investments based on the principles of supply and demand. When demand outpaces supply, buyers are in control, and prices are likely to move upward.  When supply is greater than demand, sellers are in control, and prices tend to go down.  That’s why we don’t buy or sell based on predictions or stories.  We look at what is actually happening by examining trends.
2. When the market is trending upward, we focus on growing your money. When the market trends down, we focus on preserving it.  This is done by putting strict rules in place that govern your investments.  For example, if an investment moves below a predetermined exit point, we sell.  If necessary, we can move entirely to cash if that’s what it takes to preserve your principal.

In the short term, coronavirus will probably continue to impact the markets.  The global economy will continue having symptoms.  But we don’t need to guess what the effects will be anymore than we need to guess what the weather will be like ninety days from now.  Instead, we determine the rules we need to follow to help you reach your goals, and then follow those rules to the letter.  To me, it’s comforting to know that we don’t need a crystal ball to be successful long-term investors.  We don’t need to be virus experts.  All we need to be is disciplined, informed, and prudent.

In the meantime, I expect volatility will continue.  By the time you read these words, the headlines will have changed again.  That means the markets will have probably swung again.  That’s okay.  Because while volatility is never fun, we don’t need to “figure it out.”  We’ve already done that.

While I’m encouraging you to not stress over daily headlines or market swings, I understand that’s sometimes easier said than done.  After all, it’s your money!  So, if you have any questions or concerns about your portfolio, please let me know. I will always be here for you.

Every January, I send my clients a letter titled The Year in Review, where together we look back at the year that was.  What were the highlights?  What were the “lowlights”?  What did we learn?

But this January doesn’t just mark a new year.  It marks the beginning of a new decade.  (Unless you are a strict observer of the Gregorian calendar system, in which case the next decade begins in 2021.  But I digress.)  So, for this letter, we’re going to look back at what shaped the markets in the 2010s – and what lessons we should take with us into the ‘20s.

2010-11: Aftershocks of the Great Recession

The best way to see how much can change in a decade is to remember how things were at the end of the last one.  In 2010, we were coming off the worst decade for stocks since the 1930s.  The Great Recession had devastated the retirement savings of millions of people.  Many of the world’s most famous financial institutions had collapsed.  And the national unemployment rate was near 10%.¹

It was a scary and uncertain time.  Many investors had fled the markets entirely by 2010, some for good.  As a result, they missed a remarkable recovery that was just around the corner.  Not only that, they missed the longest bull market in history.

In hindsight, it might seem obvious that there was nowhere to go but up.  But just as the start of a recession is very hard to see coming, the ending can be equally hard to wait for.  People can be forgiven for thinking the worst was still to come, because in 2010 and 2011, there were still a lot of ominous headlines to deal with.  Remember any of these terms?

Sequestration   ●   U.S. Debt Ceiling   ●   European Debt Crisis ●   Bailouts   ●   Austerity   ●   The Fiscal Cliff

For the first few years, fear abounded as to whether the global economy would be able to recover at all.  Nation after nation dealt with spiraling debt that couldn’t be paid off.  Remember how often Greece used to be in the news?  Some analysts speculated about the possibility of a second recession. 2011 was an especially tenuous year for the stock market, especially when the United States’ credit rating was downgraded for the first time in history.

2012-14: The Federal Reserve intervenes

During this time, however, the world’s largest central banks were working behind the scenes to keep the recovery going.  In the United States, for example, the Federal Reserve embarked upon a massive bond-buying program, to the tune of $85 billion per month.  This accomplished two things.  First, it flooded the money supply and kept interest rates historically low.  Lower interest rates made borrowing less costly, which meant businesses and individuals could borrow and spend more, thereby pumping more money into the economy as a whole.  This, of course, equaled growth.  Slow growth, but growth nonetheless.

The second thing the Fed’s bond-buying did was drive more investors into stocks.  Low interest rates often lead to lower returns for fixed income investments, so it was into the higher risk, higher reward stock market that investors went.  All this had been going on for years, but the results were only then becoming apparent.  So, it came almost as a surprise when the markets reached new highs, even though the economy still seemed to be licking its wounds.  It was in mid-2013 that the Dow hit 15,000 for the first time, rising to 16,000 by the end of the year, and then 17,000 the year after.

2015-16: Waiting for the other shoe to fall

But that didn’t mean the markets were immune to volatility.  Despite the economic recovery, many experts spent the decade in near-constant fear of another bear market.  Every wobble, every market correction, was watched with fearful anticipation.  It was like standing next to someone’s hospital bed, thinking every next breath will be their last.  Some of this was probably a form of post-traumatic stress caused by the Great Recession.  The rest came from the spasms of an ever-changing world.

Oil prices plunged dramatically around this time, hurting both oil-producing nations as well as the energy industry.  China’s stock market crashed.  The Greek debt crisis reared its ugly head again, prompting fears that “financial contagion” would spread and create another global recession.  And then came Brexit.  The news that the United Kingdom would leave the European Union sent shockwaves around the world.  And here at home, one of the most bitterly contested presidential elections in U.S. history had both sides of the political aisle forecasting economic ruin if the other side won.

But despite the dire predictions, these developments only slowed the recovery’s march rather than derailing it completely.  In fact, by July of 2016, the Dow once again hit new heights.

2017-19: The longest bull market

While most of the decade had seen slow-but-steady growth, the horse started picking up speed as it neared the finish line, buoyed by tax cuts, increased government spending, and corporate earnings.  Nowhere was this truer than with the Dow.  Comprised of thirty of the largest publicly-traded companies, the Dow hit 20,000 for the first time early in 2017 – and closed well above 28,000 on December 31, 2019.²

Exactly ten years before, the number was only 10,428.  That’s an increase of over 170% - the culmination of the longest bull market in history.

Of course, it wasn’t all smooth sailing.  The trade war with China is an ever-present concern, with rising tariffs often leading to brief, but dramatic downswings in the market.  2018 was actually a down year for the S&P 500, the only one of the decade.  And as the 2010s drew to a close, many economists warned of a slowing economy – with maybe even a mild recession in store.

Despite these warnings, investors did what they had done for most of the decade: Act startled, and then head right back into the markets.  Some pundits call it a market “melt-up” instead of the usual meltdown.

What have we learned?

So.  A remarkable decade filled with twists and turns.  But what did we learn? 

When I looked back at the last ten years, one thing that struck me was how interconnected the world has become.  So many of the storylines that drove the markets originated far beyond our shores.  We truly live in a global economy.  We invest in other countries, buy products in other countries, loan money to other countries (or apply for loans, as the case may be) and trade with other countries.  We might be separated by the world’s biggest ponds, but the ripples near one shore are always felt near the other.

That means two things.  One, for an advisor like me, it means there’s more than ever to keep track of.  But two, it means we should react less and less to the headlines of the day – or to each individual ripple.  A butterfly might flap its wings in Beijing and cause a hurricane in Topeka, as the saying goes, but there are butterflies flapping their wings everywhere.  That’s one reason why we saw many storms but fewer hurricanes in the 2010s.

Another thing we learned?  Sometimes, most times, slow and steady really does win the race.  We were all taught the truth of this as children when we learned the story of the tortoise and the hare.  The past decade proved it.  Everyone loves growth that comes fast and hot.  But when something burns fast and hot, it tends to burn out faster, too.  One reason we never saw the recession so many people feared is because the economy recovered as slowly as it did.  It’s a lesson we can apply to our own financial decisions.  While it’s always tempting to chase after windfalls and jackpots, it’s so much smarter to prioritize steady progress over short-term whims.  The race to your goals is a marathon, not a sprint.

A third thing we learned is how often things don’t go as predicted.  In 2010 and 2011, many experts predicted a gloomy decade for the stock markets – and they had good reason to think so!  But it didn’t happen.  When, say, Obamacare became the law of the land, many experts predicted economic disaster.  As of this writing, it hasn’t happened. When Brexit became a reality, many experts predicted a global catastrophe.  As of this writing, it hasn’t happened.  When President Trump was elected, many experts predicted a market meltdown.  As of this writing, it hasn’t happened.  We all have our opinions on whether events like these were good or bad, of course.  But it’s a good thing we didn’t base our investment decisions on any expert’s predictions!

Because if there’s one thing we learned this decade, is that a prediction is like a person’s appendix – pretty much useless.

2020 and beyond

With that in mind, I won’t make any predictions for the coming decade.  If history is correct – and it always is – another market correction, another bear market, another recession will come eventually.  Whether it’s this year, or next, or the one after that, I can’t say.  What’s more important is that we remember this: It’s when we fly that we should have the healthiest respect for gravity.  But it’s when we’re on the ground that we should raise our eyes to the skies.

Investing is like trying to find our way in the dark – and our strategy is our North Star.  It’s so much more valuable than any prediction!  We may bump into the occasional obstacle.  Sometimes, we may even trip.  But if we hold to that star, we will keep moving forward in the direction we want to go.

We will make this decade whatever we want it to be.

My team and I can’t wait to spend the next decade with you.