It Just Doesn’t Matter!

In previous newsletters, I (Jim) have quoted such global luminaries as Winston Churchill and Bob Dylan in the hope of adding gravitas to my words.  While that may or may not have helped, I think referencing a Bill Murray quote from that iconic summer movie “Meatballs” might just be more reflective of my current heat-compromised disposition!  The scene is set when Bill is attempting to rally his sad-sack campers from Camp North Star to prevail against the rich and privileged kids from nearby Camp Mohawk in the inter-camp games.  His rallying cry; “No matter what we do… even if we WIN…all the really good-lookin’ girls will still wanna go out with the Camp Mohawk guys!  It just doesn’t matter!!!”

Now, the last thing I want you to infer is that I am saying that the directionality of your hard-earned savings doesn’t matter to us!  However, what I think is fair to say is that as of late, “The Market” has so far shrugged off many negative; bordering on dire circumstances:

Wars on 2 continents – “it just doesn’t matter!”

Pernicious inflation – “it just doesn’t matter!”

Persistently high short-term interest rates – “it just doesn’t matter!”

Significant reversals in U.S. tariff policies – “it just doesn’t matter!” (well, it DID matter for a really bad 3-day period, but then “it just didn’t matter” again!)

…and the list goes on and on while the market continues to grind higher.  I think the reason the market continues to move upward, albeit at a decidedly measured pace, is that the economy is fundamentally still strong, unemployment is still low, and the counter-balancing effects of the higher interest rates on inflation is keeping the euphoria out of the markets, while also offering bond investors (like us!) some decent interest-bearing alternatives to the “TINA” (There Is No Alternative (to stocks)) market I wrote about some years back.  And while there is ALWAYS something over the horizon to worry about (massive Government debt for one thing), right now “the trend is our friend” and until something does come along to knock us off our peg, this is what we see ahead.

I also want to take a moment, however, to give another perspective to the “It Just Doesn’t Matter” quote.  I do think we need to reinforce the notion that while I attempted to use a bit of levity to illustrate what is going on in “the Market,” we are firm believers that in the long-term, the short-term fluctuations of that market “just doesn’t (don’t) matter.”  Some of you have been with us since before Y2K (remember that?) and the bursting of the Internet Bubble, the Great Financial Crisis, Covid, and many more smaller “crises” that seemed really important at the time (and indeed were) and yet somehow we have made it through all these and other turmoils in the market in order to reach periods of moderate growth and low volatility such that we are in now. We have consistently made it a point to own fundamentally solid businesses that have survived, and sometimes, thrived, in a variety of market conditions.  We endeavor to own them long enough so that the cumulative weight of their cash flows adds significant value to their enterprise.   And so long as those fundamentals hold, we will continue to be long-term owners of great businesses.

Thanks, as always, for your trust and support.

 

This material is for informational or educational purposes only.

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

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Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

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