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As hard as it is to be patient with your portfolio when the market is dropping, sometimes it is even harder to stay patient when the market begins to recover.

It has been only six weeks since the Dow Jones Industrial Average made it’s recent low on Monday, March 23rd, a 38% drop below the 2020 high of the year a month earlier. Since then we have experienced one of the most spectacular recoveries in history, with the market recovering over half of the previous fall. In comparison, after the historic 2008-09 market crash, it took almost ten months to recover 50% of the crushing losses.

As I pointed our in our February 29 letter, computer trading appears to be causing the market to fall and rise much faster than we have experienced in the past, and that, certainly, seems to be the case this year. So, given the welcome recovery in your investment portfolio, what should you do now?


As an amateur market historian, I keep business magazines in the attic going back twenty-five years and market diaries going back to the early days of Aspen Grove Asset Management (2007-08). By reviewing the news leading up to and following other market events, I believe it helps to remind us what to expect as events unfold.

During the 2008-09 Financial Crisis, action by the Fed and the Treasury Department were tentative and often delayed by contentious political fights over what many considered a bank bail-out. Ultimately, Congress did not pass a stimulus package until February 13, 2009, over five months after Fannie Mae and Freddie Mac were taken over by the federal government and the Lehman Brothers bankruptcy. Understandably, ugly economic news was being reported almost every day in early 2009.

On March 9, 2009, Warren Buffet was interviewed on CNBC, saying the economy had “fallen off a cliff.” He said “the economy can’t turn on a dime and the turnaround would not happen fast, but that five years from now the economy would be fine,” hardly the fodder for a turnaround in the market. That day, March 9, 2009 marked the bottom of the market of the Great Recession.

Disturbing news continued to flow from our friends in the media as Bernie Madoff was found guilty and sent to jail as well as constant chatter about General Motors’ imminent bankruptcy. Most economic data continued to be historically bad and most market pundits had given up on a market recovery. But a couple of things changed on March 10th.

As details began to emerge about the Federal stimulus efforts from Fed Chairman Ben Bernake and Congressional policy makers, various groups of stocks began to rally, first the banks and then the housing and auto stocks, as plans to keep these industries alive were announced and implemented. As the bad news continued, it seemed to be bad but not as bad as the experts had predicted. The market rallied and hardly slowed down for over a year, never giving the bears a lower price to re-enter the market.

In 2020, the response had been much more rapid and dwarfs the size of the efforts in 2008-09. Part of the explanation for the quick response could be experience. Handling a financial crisis in 2008 was new territory for the individuals in charge at the time, but currently we have the two original authors of the 2008 Troubled Asset Relief Act in influential positions. Aides to Treasury Secretary Paulson were asked to draft the original “TARP” legislation in case of a collapse of the financial system. Neel Kashkari, now the President of the Federal Reserve Bank of Minneapolis and Phillip Swagel, currently the director of the Congressional Budget Office, now in very influential positions, were most likely heavily involved in the response to the CoronaVirus crisis.


No one should feel foolish if your market predictions have not turned out well this year. Two of the most successful investors in history now have egg covering their faces as a result of the CoronaVirus and the 2020 stock market.

On January 21st, only three weeks before the peak of the 2020 market, Ray Dalio, founder of Bridgewater Associates, and currently the largest hedge fund manager in the world, proclaimed that “cash is trash”, advising investors to hold on to their stocks. Obviously, that turned out to be the wrong message at the wrong time, and Dalio’s hedge funds suffered as the market subsequently dropped.

Even Warren Buffet recently had to admit that he is not always right and share a mistake with his investors. After many years in which he had warned against owning airline stocks, Buffett concluded that consolidation in the airline industry had adequately reduced the competition in the industry, ultimately purchasing billions of dollars in airline stocks. This year he decided he had made a mistake and sold his entire stake in the airline industry, losing several billion dollars in the process. He just hadn’t considered a pandemic.


Although much of the news over the next several months will continue to be disturbing, with heartbreaking stories of job losses and bankruptcies, the market seems to have found the floor and is attempting to climb the wall of worry higher. Many of the stocks in the most severely impacted industries, such as the travel and recreation industries, appear to have bottomed and started their recovery, giving us confidence that the worst is most likely over.

In my opinion, now is not a good time to drastically change your investment strategy or to run from the market. It might be, however, a good time for us to evaluate your specific stocks and funds and make a change if they are not accomplishing their intended purpose. For example, “low volatility” funds did not turn out to have volatility significantly different from that of the overall market, so we are re-evaluating our commitment to that group.

Another group of companies that appear to be a necessity in our new world will be the digital companies that have made it possible for us to adjust to the social distancing that appears to be with us in the future. We have a couple of funds that have successfully provided exposure to that group that we will be adding to our mix going forward.

And any individual stocks that we own will have to stand the test of whether they fit in the new economy. Expect to see a few changes there as well.


We continue to believe that in our current low-interest-rate world, the stocks of quality companies that provide the products and services needed by the growing numbers of middle-class consumers around the world, will provide investors with the best opportunity to meet their needs for retirement income. As Bill McDermott, CEO of ServiceNow Corporation said recently:

“The American Dream is an unstoppable force.”

We hope to be meeting with you personally in the near future. Until then, please give us a call for any details you might want to discuss on your portfolio.


Dave Crouch Kim Blackburn Kay O’Connell

Registered Principal Branch Operations Manager Financial Advisor

Financial Advisor

Buffett Quote:

“If a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.

Warren Buffett wrote in his 2007 annual letter

This material is being provided for informational purposes only. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Expressions of opinion are provided as of the date above and subject to change. Any information should not be deemed a recommendation to buy, hold or sell any security. Certain information has been obtained from third-party sources we consider reliable, but we do not guarantee that such information is accurate or complete. This report is not a complete description of the securities, markets, or developments referred to in this material and does not include all available data necessary for making an investment decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct.

“Life would be infinitely happier if we could only be born at the age of eighty and gradually approach eighteen.”

Mark Twain

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