The Disease, the Cure, and the New Cure

Most people who are paying attention recognize that things in the world are not going particularly well these days.  We certainly recognize this and are challenged with helping our clients manage through the vast amount of data and information that comes out each day in order that they can make sound financial decisions.  In difficult times it is our long-held belief that sticking to your discipline in investing is crucial.  In fact, an investor's very survival depends on it, in our view. 

As such, we would be remiss for not pointing out when things go awry, and we did just that in March of 2020 with our blog post entitled "Time For A Pushback".  We later followed up in April 2020 with "Still Pushing Back".  We urge our clients and others to read those posts if you haven't already.  We fully stand by all we said in those articles, despite at the time receiving some pretty negative feedback.

Today, another sage voice in the world of economics, Brain Wesbury, posted in his blog an article in which he gives an overview of our current economic circumstances brought about largely by the response to the COVID virus.  In "The Cost of Lockdowns", Brian outlines the myriad problems caused by the exact types of actions we highlighted almost a year and a half ago.  Unfortunately, it is going to take years to undo the damage that has been done, and, as we said in our pieces, the most vulnerable of the world's population are the ones who are most negatively impacted.  This is extremely sad and unfortunate, but it is important to keep one's wits about oneself and stay focused on the challenges ahead.  

Well-managed, innovative businesses will still succeed -- and in many cases thrive -- while navigating these challenges.  We would argue that these companies are the bright lights that will help guide the way back from the precipice.  It is our intention to stay fully invested in such companies, and continue to seek out new ones that will also drive the effort.  This is the "New Cure" that is needed.  And it is on its way, as we have now added a plethora of new companies in the past year and a half, reversing the "8000-to-4000 problem" (the decline in the number of publicly-listed companies on US exchanges) that we have lamented at length over the last several years.  

We now stand at a count over 5,800 public companies on US exchanges.  Thanks to a little-understood vehicle called the "special purpose acquisition corporation" (SPAC), we are witnessing a resurgence in new innovative public companies for the first time in years.  This increase in new company formation and growth is what leads us out of this malaise (NOT a guarantee), and we see no reason this trend can't continue.   And it can't happen soon enough!

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