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An open letter to investors from our CEO

There is so much being said about everything in the (investment) world; the choice of our team has been to listen. Even when there are quiet moments, we do not think we can improve upon the silence. However, in what is now our 14th year of operation, the views of the team and to a lesser degree my own view seem to be increasingly sought after. These views often differ, but our guiding values are always consistent.

The portfolios we manage on your behalf are individually customized and the vast majority contain assets that work in concert with each other. Quite recently, Treasury Bills and Notes issued by the US Government may form the foundation of many a portfolio along with foreign-issued bonds on local institutional names. We hedge an increasingly volatile geopolitical environment with bond issues that bear limited correlation to market risk, though they face the charge of rising interest rates.

The ’look at me assets’ have made their way into the conversation as we have started a changing of the guard . Murphy Clarke investors know the difference between gambling; speculation and investing. There is a lot to be said about ‘the good ole days’ – but when we consider the speed of rising prices… the good ole days were last week! 

A look at the market for the year 2023 thus far and having considered both the stock and bond market for 2022 warrants a look back at a statement made by the Oracle of Omaha over 40 years ago:

“Yardsticks seldom are discarded while yielding favorable readings. But when results deteriorate, most managers favor the disposition of the yardstick rather than the disposition of the manager”

In the context of a rising interest rate environment and with US Treasuries (T-Bills; Notes and Bonds) offering compelling yields, the argument for some issues and pricing of many others regionally gives me no comfort. The beauty of being an independent firm is that we can say these things.

The domestic investment arena proves to be at times objectionable and while we have returned to these shores because value exists, it is not without liquidity and marketability challenges. This is the market in which we live, many systems work and we have to hold to a sense of optimism.

“Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence”

Helen Keller

We acknowledge optimism is not the same as hope.

Looking forward our goal continues to be superior performance with less-than-commensurate risk as opposed to chasing superior returns. In good times many a manager will perform, however, in the bad times, some differentiate themselves by proving their skill. We have not seen rates like these in some time and consistency is the name of the game. This is not a T-20 match – and high scores followed by abysmal performance do not bode well for our client base, which continues to fit well into our family office structure.

The combination of fundamental analysis with country/sector-specific leads and insights allows us to invest in stocks that trade at a discount to their intrinsic value. It is not sexy, nor does it have to be. Our experience and access to thought leaders assist in the limiting of downside risk while identifying potential opportunities.

Many a client (and I daresay many a friend) we have lost in the last six months and looking over the last three years, our engagement is more and more with a new generation. The conversations and indelible impressions many of our early clients have left on the firm, and on me personally, are treasured.

Looking forward, the firm has added capacity and is moving in a direction that considers the new crop of investors, many of whom have taken over the reins from an alpha generation. Fareesha, Danielle, Andrew and Eric are part of a team that melds unusual talent, energy and character to deliver exceptional financial results for you. The cast that moves shoulder to shoulder with them represents a committed and focused team – they are far more than we deserve, but we are willing to live with such inequity.

In conclusion, we have launched our new ‘evolving globe’ logo. It is part of a greater brand-building initiative. All work was done in-house and your response has been encouraging. The triad of quadrants reflects our firm’s solid grounding in traditions of equal respect and committed partnerships with our clients, our community and our ecological system. The upturned future-focused quadrant symbolizes our pioneering exploration of financial possibilities.

Our destination is unchanged: to enhance our client’s financial security; wellbeing and to provide meaningful investment solutions.

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