Perspectives

Good morning. After last night’s failed Senate vote, we noted suggesting that failure likely needed to happen to move the process forward and that a deal could be announced this morning. Negotiators are not there yet. Following a series of meetings late last night, Senator Schumer remarked at 12:30am that there still was no agreement, negotiators were getting closer, staff would work through the night, and the principals will reconvene in the morning at 9am. The legislation is already weeks b… View More

More than 250 years ago our founding fathers founded this republic to make life better for their fellow citizens. Our constitution starts with the following preamble: “We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America”… View More

Estimates for 2Q GDP growth are ratcheting down and a 10 percent contraction is not far off from the consensus. Initial unemployment claims could reach 1 million next week. If policymakers get this wrong, contagion can easily spread, despite the temporary nature of the coronavirus. In that context, Congress is rushing to get a $1 trillion plus stimulus passed in the coming days. Senate Republicans released their plan last night. There are large differences between the goals of the two parties, b… View More

After listening to Governor Newsom’s “stay-in-place” decree last night, we had a lengthy discussion about the impact of a total lock down on California, the market and our expectations for it. During that discussion, we talked about the emotions elicited by both market gains and market selloffs. A key observation was that it easy to buy into a jubilant market, but it can be difficult to remain invested during a significant market draw-down. Below is a chart of the Dow Jones Industrial Ave… View More

We spent last week warning policymakers about the urgency and magnitude of the economic fallout from the coronavirus. To be fair, Congress will always lag market participants, and politics constrains a quick response. But the gap was so wide between financial market participants and policymakers that we were deeply concerned. Exactly one week ago today, the consensus view in Congress was to take a wait-and-see approach. But as we all know, once the slowdown hits the data, we are too late. Financ… View More

Markets across the globe sold off last week as the coronavirus spread to over 125 countries and oil prices reflected last week’s failed OPEC+ negotiations. The markets gyrated wildly last week: for example, the Dow Jones Industrial average lost 2,013 on Monday, gained 1,167 on Tuesday, lost 1,464 on Wednesday, lost 2,352 on Thursday and ended the week with a 1,985 gain on Friday. Thursday’s selloff was the worst since October, 1987. Last week, all of the major indices entered a bear market (… View More

There are a couple of topics we want to discuss this morning; the risk of market timing and the Fed's actions overnight. With respect to market timing, we understand the temptation to try to time the market, but moves like Friday's help demonstrate exactly why we should not. There will be up days and up periods that investors will miss, and missing those periods will have a negative impact on investor returns. In looking at the last 25 years of the market's data, we found that if an investor ha… View More

We wanted to take this opportunity to say thank you for your continued trust in our firm’s Intellectual Capital. Even though we have never been through this type of scenario before, we remain confident that we will get through this and will have a V shaped recovery once we get some clarity on the virus and its effects on the economy in the short-term. We would like to let you know that since the day we founded Fortem, we have built a very robust Technology platform that will allow us to work r… View More

We continue to hear that the world has NEVER known something like the Coronavirus pandemic, so we decided to do some digging to see what we could find. Interestingly, the first thing we came across was the "H1N1" flu virus. You can access the information yourself from the CDC's website following this link if you would like to: https://www.cdc.gov/flu/pandemic-resources/2009-h1n1-pandemic.html We quote from the CDC, "In the spring of 2009, a novel influenza A (H1N1) virus emerged. It was det… View More

Yesterday was a hard day in the market; some may even contend the market has "never been this bad." But that would be our emotions speaking, and it would be factually incorrect. The S&P 500 was down 9.5%, a far cry from the 22.6% it lost on Black Monday - October 19, 1987. We only bring this up because we believe it provides perspective. It is easy to allow ourselves to believe that the current conditions are the WORST that have ever been. Time (and gains) heal old wounds in the market. The… View More