2008 Letters to Clients

If ever there was a vivid example of the notion that time is relative, it was the last four months of 2008.

Was it really in only 120 days’ time – less, actually – that Lehman Brothers collapsed, Merrill Lynch was forced to merge with Bank of America, Wachovia was forced to merge with Well Fargo, Citibank nearly failed before being bailed out, as did the entire U.S. auto industry, scores of financial services firms – including Goldman Sachs, Morgan Stanley and American Express – changed their stripes to become bank holding companies so they could belly up to the government bailout trough, and Ben Bernanke and Hank Paulson morphed from government officials into a two-headed monster that got to decide who lives and who dies in American Enterprise? Oh, and the stock market dropped 20% in six trading sessions and posted its worst year since 1931. Read More »


“I guess it comes down to whether I believe in capitalism itself. And I do.”

Those were the musings of one of our clients we spoke with late in the week of October 6, a period of time in which the world’s major stock markets all saw declines of between 20% and 25% in just five trading sessions. He was reaffirming that, while it is unsettling and extremely painful to experience a sudden plunge of such magnitude, he still had faith in the ability of the free-enterprise system to mend itself over time and resume what has essentially been a three-century success story. Read More »


Ask anyone who has spent a few winters up north and they will tell you an interesting thing about the experience. It isn’t the depth of the winter that gets to you; it’s the length of it. It’s easy enough to ride out the occasional deep freeze, but that’s not the real challenge. The real test of your psyche is to be able to withstand the long run of ups-and-downs – warmer, then colder, then warmer, then colder still. It just goes on and on and right when you think you can finally see the light at the end of the tunnel – wham! – a spring blizzard hits and you’re back to the snow shoveling. And that is often the point that people throw in the towel and head south. Read More »


In considering First Quarter 2008 we are reminded of the old Chinese curse, “May you live in interesting times.”

It was, to put it mildly, a volatile quarter for the stock market. The reasons for that volatility have been endlessly dissected by the media and we won’t waste more space here revisiting the conditions that caused the deep decline in stocks. The more relevant question is: What have we learned? Read More »