People Have Had Their Confidence Shattered

Client Reaction to Pandemic: We didn’t receive any more inquiries than normal. The hours that we worked did not increase. We are primarily a discretionary money manager with institutional clients that have a very long timeframe – public pension funds and retirement plans like the city of Boston, the city of Memphis, the Peoria Police in Illinois. A lot of money from Teamsters, electrical workers, operating engineers and folks like that. And then endowments and foundations like the Elks National Foundation and Lebanese American University and some in Southern California like the Ventura County Sheriff’s Foundation and the Oxnard College Foundation. They have very long horizons and we enjoy their trust and confidence to do the right thing long term on their behalf. Client Questions/Your Reponses: We didn’t really have any (questions). Our clients get quarterly updates with written commentary and some will call. The institutional investing community is driven by consultants. We have talked with some of those folks who are working remotely. Really nothing out of the ordinary for us. Memorable Moments: We already had a distributed workforce. We have offices in Massachusetts and a suburb of Austin, Texas as well as the one in Camarillo. In response to the pandemic, we activated our business continuity plan which has pretty much everyone working from home on a fulltime basis. I am happy to say that because we spent robustly on technology, we have not encountered any issues. It has been an unfortunate thing, but it didn’t create a lot of disruption for us nor did we experience any disruption with our counter parties – the custodians and trading desks that we work with. I am happy to say it has been business as usual. 2020 Economic Disruption Compared to Others: I have been around a long time. I have been doing this for 30 years and we have never seen anything like this. Large swaths of the economy had simply shut down and are getting back to what I call normal very slowly. We are not going to see a V-shaped recovery. It’s going to take a couple three quarters to get things back to where they were. It certainly has been interesting. How Your Personality Helps: I spent a lot of years as a policeman. Until October 2018, I worked as a sergeant on a homicide team at (Ventura County) sheriff’s major crimes, so it was pretty easy for me to put things into perspective instead of panicking. Don’t get me wrong – the loss of life has been horrendous. But I think the concern with respect to the virus is that people should be more worried about the lasting economic damage that is being done. Changes to Portfolios:We didn’t. We did own a publicly traded movie theater chain and exited that position because there was no visibility on their earnings going forward. Mostly though, it is business as usual. Advice to Clients Now: I think no one has made money betting against the American economy and I wouldn’t bet against it at this point in time. Walmart will be open for business. McDonald’s will be selling cheeseburgers. The auto makers will sell cars. At some point in time, people will return to the skies and fly to Maui for vacation and do things like that. Things will be back to where they were pre-coronavirus. It’s just going to take a while. People have had their confidence shattered to an extent and it will take a while to get that back and take a while for people to get comfortable. Financial Management Business: We were solid. Our 10 people and their families are fine and were doing fine before coronavirus and are doing fine now. We are fortunate to not be among the folks severely impacted by this.