On March 23rd we posted a piece "It's Time For A Pushback". In it, we argued that shutting down the economy, and thereby creating severe economic hardship, can cost lives as it tends to harm the most economically vulnerable most severely; those at the lowest levels of the socio-economic ladder. We usually are pretty benign in our commentaries, and thus, don't get much outside commentary back at us. With that piece however, we had some detractors who thought we were crazy.
We want to emphasize that we fully support efforts to use common sense at controlling the spread of the COVID-19 virus. That should go without saying. We also understand that policy-makers are in a difficult situation of being "damned if you do, damned if you don't." Therefore, our point was simply meant to balance the conventional wisdom about the repercussions of closing the world economy in the battle against the virus. Those who don't believe that economic hardship cost real lives are simply denying the facts of history.
Since that time we have come across other voices who have echoed similar sentiments, here also. One who we respect greatly for his insights on the economy and who we have been monitoring for over 25 years is Brian Wesbury of First Trust Advisors. In his piece published today "Do the Least Harm", it would appear he has similar views to ours with respect to the economic impacts of shutting down the economy. We appreciate Brian's commentary, as always.
Lastly, we have been in constant contact with our companies in the last few weeks, and while their stock prices have by no means been immune to the downturn, we are extremely impressed with the capable management teams that run our companies and are very confident that they will come out of this stronger than ever. And in some cases, they will strangely benefit from this debacle. Investing in "well-run companies in front of fertile field of future growth" has worked very well in the past and we believe will continue to work into the future. Stay tuned.
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