To our Dearest Friends and Clients,
We hope you and your family are safe and well. We know this is a challenging time full of uncertainty and worry. We want to let you know that all GPM team members are working remotely from our homes. We are all safe and healthy. Our technology gives us full and secure access to all of our data and portfolio management and reporting platforms, enabling us to operate with a high level of productivity from nearly any remote location. Feel free to call or email us as usual.
Near-term, the number of confirmed Covid-19 U.S. patients will rise dramatically. Financial markets will remain volatile as investors digest the data and gauge the success of suppression strategies. While this all seems overwhelmingly negative now, some incrementally positive developments will almost surely emerge on the health front. Fiscal and monetary actions should be supportive. Without a doubt, the news will get worse, but its ability to shock us will diminish. The stock market decline discounts much of the bad news to come.
Our approach to stock investing is totally focused on U.S. based growth companies that compete and win around the world - businesses investing in themselves to fuel growth.
Consistent with our strategy, we plan to continue holding most/nearly all the 29 stocks we own. In this broad sell-off, some stocks have been or are being hit harder than others, which sets up many more relative value disparities than existed weeks ago. We plan to increase the size of some currently held positions while reducing others. Additionally, many other companies in our focus universe that we don't own have become historically attractive, so we expect to execute some opportunistic swaps. GPM’s research and portfolio management team, Mark Hogan and Tim Griffin are laser focused on our companies and opportunities. They talk nearly every day with or otherwise consider the businesses in which we have invested or are interested in investing and study their balance sheets so we can be confident those businesses will be able to realize their growth prospects. If their financial position is strong, we think their profitability will rebound after a short-term interruption, and they will continue to grow over the long term.
Opportune times like we believe we are in today enable us to buy high quality companies at attractive prices and hold for the long term. We believe now is such a time even if a market rebound is not yet visible.
Investing today requires optimism about our future.
If it is not already a great time to own high quality U.S. stocks, we believe it will soon be. Interest rates have never been lower. Low interest rates make stocks more attractive. Government monetary stimulus has never been greater. The more stimulus there is, the more attractive stocks are. Quantitative easing is back and in full force. Additional massive fiscal stimulus is coming. A few days ago, U.S. Treasury Secretary Steven Mnuchin said “we are in the second inning” of what the government plans to do.
Stay safe and healthy.