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Lessons Learned

Our lessons learned in 2020 would take up volumes, but there is an axiom that was strongly confirmed: The stock market is not the economy.

  • Because the market is a discounting mechanism, there is often a disconnect between the performance of stocks and the current economic environment. In 2020, that disconnect became a gaping chasm with the market reaching several new highs despite GDP and employment figures that rivaled the Great Depression.

Our Outlook

  • Though the initial rollout of the approved vaccines is moving slower than expected, increased immunization and a second stimulus package should support, if not accelerate, a return to more normal economic activity.
  • Even more, some industries may experience catch-up demand that could lead to periods of over earning that would be dangerous to extrapolate.
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Our research team will continue to take the long view and look for opportunities to invest more in what we believe are quality businesses — both among our current holdings and in enterprises we’ve admired and desired to own but were too richly priced for us.