Empathy
Investing is challenging. Finding the right securities, the perfect
distribution of risks, the appropriate allocations is a knack every one of us
strives for. The landscape of information
from which to choose is immense; how we interpret that data to structure a
portfolio is another issue altogether.
Those decisions, while predicated upon science or methodological
preferences are deeply personal. The
only thing that ultimately matters is how
the measurable outcome of those decisions meaningfully impacts our portfolios,
our lives, and to what degree are we satisfied afterwards.
Today, millions of people are
suffering financial, economic, and social harm from the Covid virus
pandemic. While the prospects for
vaccine creation and distribution are encouraging, the challenge is in the
interim, waiting for that time when the disease is manageable or eradicated
altogether. In the meantime, its consequence
upon business and social structure has been catastrophic.
How do we prepare clients,
portfolios, and society for the immediate effects and for the future? One way is to acknowledge that goals, like
life itself, are ever-changing.
Quantitative statistics classifies things as “probabilities", never
submitting definitive timelines or static points in time. We traverse
through time, we should not be counting before the game is over. Success is simply that journey towards something, not the ultimate, itself. How we prepare for the voyage and what we
expect from it is every bit as important, if not more so, as the integer we
might ascribe to evaluate it. Unlike
darts or archery, the investment target is never sitting absolutely still, nor
should it be the actual ambition.
During a crisis, in particular, it
would be wise to embrace this passage and to be persistent in redefining the
ultimate objective as often as necessary.
Prudent asset allocation involves assessment
of the ephemeral nature of things and to invest in businesses that can sustain
consumer demand and earnings acceleration over time. Also, we seek to own businesses that are
innovative, which offer new ideas and solutions for issues that affect the
human condition. Their focus is not only
on today but gaining a competitive advantage tomorrow.
Market uncertainty during the past
week (year) orients around business' alacrity to spend wisely, hire
effectively, and to innovate quickly.
Initiatives in healthcare, energy, hunger, and community empathy are the
hallmarks of successful investing, and ones which level the uneven playing
field for everyone.
The world is, and has been, changing
right in front of us, in part because of the pandemic, but also because of
social activism and political transformation.
Just as the global economy was reaching new heights earlier this year it
was ripped away from us by sickness and death.
But optimism abounds that despite life's uncertainties we can bond with
the frailties and strengths that unite us all to our heroic selves, as well as
recognizing the compelling investment opportunities which attach. Notable among
them are health and life sciences, renewable energy, infrastructure, education,
ecology, and water and food shortages.
Most importantly, each of us has to
be an advocate...not just for our own self-interests, but for the needs of
others. Effective problem solving is a
collaborative effort, bringing together disparate points of view to promote the
common good.
Funny...but that also reads like the
definition of entrepreneurship and elementary capitalism....
