Like most of us, you are probably adjusting to the “new normal” daily life of home schooling, social distancing, virtual meetings and curb side deliveries.
After working remotely for the last week, what has not changed at Sendero are the internal conversations and encouragements between employees, while not losing sight of the human element in relationships. In some ways, we have increased our intentional communication, making sure we help each other and continue to watch over your portfolios.
As with our internal communications, our engagement with our managers about portfolio activity, positioning and opportunities has continued. While the velocity of this drawdown has taken many by surprise, “quality companies are still quality companies” and there is an opportunity set for “good old-fashioned stock picking for the long-term.” Other areas to look at are portions of the fixed income market that have shown stress and may have opportunities to invest.
We are going through the exercise of quantifying the contraction in earnings and economic activity in 2020. I will not mince my words – the economic data for the next few weeks, and even months, will be unpleasant (and the media will be quick to sensationalize it). However, economic activity will resume once the health component of this crisis is better understood and under control.
This leads to the discounting nature of the stock market. Some experts we are talking to are looking at 2021 and 2022 earnings, instead of the second quarter of 2020. Stocks will move ahead of our ability to emotionally respond to this crisis.
With this in mind, our goal at Sendero is to offer insightful and timely communication, while personally staying connected to you. In a complex and fluid world, we want to keep our thoughts and actions simple and disciplined.
If you have any questions or want to have a conversation about the market or your portfolio, please contact Liz, Ed, Fred, Scott, Tyler or myself. Your Sendero team is ready to help.
Best Regards,
Amaury de Barros Conti
210-930-9409
aconti@sendero.com
