Real Impact, Real Returns ^SM

When we started the year, I was optimistic about the post-pandemic world that was, and is, still some ways off; a sentiment I shared with many. That optimism does not seem to have been misplaced thus far. Vaccination rates have far exceeded early predictions and herd immunity in the United States is a mere 3months off, according to Bloomberg’s Vaccine Tracker. At the same time, we should bear in mind that many countries, including India and Brazil, are far from out of the woods and 2021 might well end up being deadlier than 2020was, from a global perspective.

I feel optimistic about the future. To be sure, that is no reflection of what is today, but of what is possible. Almost every holiday card I received, hit 2020 with the door on the way out. Although the personal and collective tragedies of this past year will not soon recede from memory, hopeful seeds are sprouting.

2020 will come to an end, that is one of the few certainties we have as we are nearing the election and a fall wave of the pandemic appears to be materializing. For many folks I speak to – and I share their sentiment – this year will not be missed. So, what of the election? What is an investor to do? Though a fair question, I cannot really line up behind a better strategy than to not do much or nothing at all. Whatever action one takes, has an unpredictable outcome, so could potentially do more harm than good.

Three months have passed since our last newsletter and the Coronavirus is still with us. For better or worse, people have adapted somewhat to the new reality. It does not make it less tragic, but a perennial state of crisis is not a preferred way to live. It is also quite remarkable how adaptable people are, giving credence to the expression “necessity is the mother of invention.” Folks have taken to working from home, moving professional and social lives to a virtual setting, and figuring out how to navigate the six feet exclusionary zone, for the most part. This adaptive coping is not entirely unrelated to the relentless recovery in the stock market. Be that as it may, it still begs the question: why is the stock market going up when the economy is going down? If you haven't seen that headline before, you read it here first. It is always possible to create a narrative to explain what happens in the stock market, after the fact.

Gone are the days – and they have been gone for a while – where peak oil meant peak oil supply. It now means peak oil demand. And when demand for an oversupplied commodity drops, its price craters.

I hope this letter finds you healthy in body and spirit. First, let me join many in expressing gratitude for the people who work in essential businesses that keep the food supply going, see to our health, ensure our power & water remains on, and respond to our emergencies, often with great risk to their own safety.