Broker Check

Lessons Learned | President's Message

April 12, 2019
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To date, 2019 has surprised many investors with the strength in equity prices. We expect a more positive environment in general in 2019 with periodic corrective phases. Over the years of managing client portfolios, there are some core important principles we have come to adopt. These are the principles we utilize in managing our client's accounts:


1. Lean against the wind.When all the Wall Street analysts see is clear blue sky, prepare for a few rain clouds and maybe even a thunderstorm. There are infrequent times when one should act defensively and take less risk. Today is not one of those periods. However, one may develop in the coming years.

2. Diversity both among asset classes and within asset classes. Spreading the bets out is always very useful in reducing risks. When you take very concentrated bets focused on the same trend – it hurts more when you strike out.


3. Remain optimistic long term. There are very few permanent bears who survive on Wall Street. Why? Because our economy and markets are the most creative, adaptive, innovative and resilient on the planet. We continue to reinvent our economy. Over time our economy figures out our weaknesses and fixes them. We do keep moving forward!

4. Look for new sectors and areas of the economy growing and adapting.Some of these sectors and companies can grow 4-5 times faster than the rest of the economy. Also, just as important – avoid deteriorating parts of our economy.


5. The economy and the markets are often out of sync– do not expect this to change. Stock markets “price in” the coming 12-18 months in stock prices today.


6. Believe in the entrepreneurs of this country to help move us forward. Over the past 36 years, we achieved much more than I ever believed possible. We still are innovating and growing in many exciting ways. Capitalism works wonders.

In March, I attended a Charles Schwab Conference in Scottsdale, Arizona, at which I heard Alan Mulally (former Boeing and Ford CEO) speak to our group. He shared some of his leadership philosophy that allowed him to turn around Ford and helped him create amazing success at Boeing. I will share a few of his secrets. For anyone who has ever run a business, you will know these are key factors in creating success. These are in fact many good principles of being a good human being! According to Mr. Mulally, use the following principles:

1.) People first – love them up
2.) Profitable growth for all – employees, shareholders, suppliers
3.) Everyone is included - work to "include" all
4.) Clear, measurable performance goals - all know the plan
5.) Respect, listen, help and appreciate each other
6.) Emotional resilience
7.) Have fun – enjoy the journey and each other’s contributions

We are hopeful for positive developments in the coming year.