Our World Has Changed

“Crisis does not create character; it reveals it.” – Jim Stovall, Wisdom for Winners

In just a few short months, our world has changed. 

Even the word “pandemic” is scary.  Health officials have labeled the coronavirus as “novel,” because the human species has never been exposed to it.  We seemingly have no natural antibodies. As the news of the virus has unfolded, and nations and communities accepted that our first (and possibly only) line of defense was the concept of “social distancing,” I gained a newfound respect for survivors of previous pandemics. The Bubonic Plague. The Spanish Flu.  Or even 1612 when Native Americans welcomed the Pilgrim settlers traveling from Europe bringing with them smiles, smallpox, and leptospirosis[2]

Tariffs and Taxes and Data, Oh My!

“Volatility scares enough people out of the market to generate superior returns for those who stay in.”

– Jeremy Siegel, Professor of Finance at The Wharton School

The year has started with volatility that we haven’t seen in the last two years, and it continues as I write this letter. There are two primary narratives driving current markets:

  1. A possible China/global trade war and,
  2. A broader technology stock selloff due to backlash over privacy/data lapses, and concerns over government regulation of the largest tech companies.

I will spend some time discussing both topics.

From Hofstadter to Organic Free Range

“Stocks aren’t lottery tickets. There’s a company attached to every share.”  – Peter Lynch

The big news of the quarter was the announcement that Amazon intends to purchase Whole Foods for $13.4B in a deal that will extend the online shopping mall into a bricks and mortar merchant with more than 460 physical locations in the US, Canada and Great Britain. What does this do for the company? Won’t this turn Amazon into one of its outdated, old-line competitors?