What a great disconnect can exist between what we think we know, what we think others know, and what they actually believe and know. It no doubt works in the reverse, too. We felt that perhaps this presentation was repeating once too often the same observations – albeit with exciting new details!! – about the valuation divide between index-centric securities and all the rest, and about the severe concentration risk of ‘the market’. That perhaps it was overkill to show, via correspondence to two clients, just how our equity and income portfolios are structured entirely different than ‘the market’, that they are really, functionally, completion indexes: everything the market isn’t and nothing the market is. In fact, this year-end review was shaped by client comments wondering when the indexation bubble would end, and what would make it end – a certain weariness with this seemingly unending cycle. There’s plenty of responsive information inside.

But the great reminder that one can’t repeat or refine such messages enough was this response to this year-end review. It was in an email from a seasoned professional financial journalist and analyst, someone with exposure to the breadth of investment thought and techniques: “…And, I [noted] your points about the non-persistence of the largest constituents of the S&P 500. Also, I didn’t know it was still possible to craft a portfolio of un-indexed securities!

Download: 4th Quarter 2019 Commentary