• People have money to spend. Many of those fortunate to have continued working the past 12 months have socked a good chunk of their paychecks away for a sunnier day. A recent report from the U.S. Bureau of Economic Analysis found that Americans have more than $2 trillion in savings — nearly three times what we had just one year ago.
• Interest rates have started to creep up off historical lows, but the housing industry is still soaring and driving spin-off spending. This includes realtors, attorneys, title companies, lumber manufacturers, appliance makers, and everyone else who has a hand in building and equipping a new home. It also means more people back to work.
• Virtually every company that I have spoken to in recent weeks, including those we own and those we do not, is projecting 2021 growth that could achieve record-high profits, sales, and dividends. This, in turn, should create an economy where everyone who wants a job can find one.

Are there risks? Of course. It will be some time before we know the true cost consequences of the federal stimulus spending, including whether it leads to a period of inflation and higher interest rates. We will keep these things in our peripheral vision, but our focus is on the positive signs we see ahead.

As always, Fenimore Asset Management (“Fenimore”) will continue to put our confidence only in businesses that meet our stringent quality criteria. We believe in owning shares in businesses that can maximize their growth opportunities, but also have the financial strength and intellectual capital to weather the types of challenges we have been through over the past 12 months.

Our goal every day is to protect and grow your wealth over the long term while providing service that is steeped in responsiveness, transparency, and integrity. We hope that you found this to be true during the very trying past year and we look forward to being alongside you for what we expect to be a much more enjoyable 2021.

SALUTING A SILVER ANNIVERSARY

I am not sure what we were thinking launching a mutual fund on April Fools’ Day, but 25 years later the FAM Dividend Focus Fund (FAMEX) has proven it is very serious about successful, long-term results. Congratulations to our portfolio managers — Paul Hogan, Tom Putnam, and Will Preston — and our entire research team on this milestone anniversary!

Paul and Tom have managed FAMEX since its inception. As Barron’s highlighted in a feature article about Paul Hogan and FAMEX, “The best money managers aren’t the ones who make no mistakes. They don’t exist. The best are ones who learn from their mistakes and improve as a result — and the only way to tell if you’ve found one is if a manager’s been around long enough to see the improvement.”(Barron’s, 12/4/2019, “This Fund Manager Has Beaten 99% of His Peers. How He Picks Winning Dividend Stocks.”)

NEW WEBSITE

Fenimore is launching a new website this spring. Our goal is to create an enhanced user experience for our investors and visitors.

Some of the new features include “News & Insights” prominently displayed on the home page and “Investor Education.” The web address is the same. We hope you find the site to be helpful, timely, and informational.

LET’S CONNECT

You can reach us with any questions at 800-932-3271, through the “Contact Us” section of our website, or at info@fenimoreasset.com. We also welcome you to meet with us via video conference or in our Albany or Cobleskill office.

Thank you for taking a few minutes to read our letter and thank you for the continued confidence you show in our team.

Sincerely,

John D. Fox, CFA

CHIEF EXECUTIVE OFFICER