QPW Annual Letter from the Chairman – 2020
March 3, 2020
Even Methuselah Died
Methuselah was the longest-living person in the Bible. Depending upon the interpretation, he lived to be 969 years old, give or take a few. In today’s world, we also have some historically long-lived events taking place, although not on a Biblical scale, of course.
The last ten years have certainly been historic. There was annualized double-digit S&P growth over the past decade. Equities are experiencing their longest bull market in history. Interest rates are at historic lows. We are now in the longest economic expansion in history, albeit accompanied by one of the lowest GDP growth rates ever in a ten-year period. While there is value in reviewing this unique period in history, let’s look forward.
We are entering yet another new decade. However, as the famous philosopher, Yogi Berra, once observed: “It is difficult to make projections, especially about the future.” While the US equity market is coming off a very successful decade, there has never been a ten-year period that followed such a win-streak whose returns were anywhere near as impressive as the first ten. This data does not mean we are taking a doom-and-gloom position on the future. We just continue to emphasize that the need for risk focus and management has probably never been higher.
While there are countless unknowns, I would like to highlight some “knowns” and share some introductions. 2020 will be a benchmark year for me. My career in this industry will be turning 50 years old (another modern-day Methuselah?). Our firm will celebrate its 6-year anniversary in just a few months, hard to believe. In June, Quadrant Private Wealth will have occupied its renovated World Headquarters for three years.
Our firm has grown, patiently. In 2019, we were very pleased to hire the first student who transitioned from our intern program to become a full-time employee. Mike Mittl graduated from Moravian College and joined QPW as a Financial Analyst. Last month, we proudly announced that Joe Flannery had joined Quadrant as a Private Wealth Advisor after a very successful career in sales & finance. Just last week, another former Merrill Lynch team, The Decker Group, became a part of Quadrant Private Wealth. Dave Decker Jr. and his team, Paul Francis and Mona Campos, bring a valuable dimension of depth, perspective, and talent to Quadrant. We are so excited to have them aboard.
All of these additions to our firm have something in common. These are genuinely wonderful individuals that have merged into our family. There is no doubt that QPW and our clients will benefit by working with these outstanding people. Part of the “dating process” was to evaluate each other’s philosophies and priorities. The biggest takeaway is our new colleagues’ client-centric focus, a theme that we have propounded since our inception. We happily welcome them all, and deeply appreciate that they are as confident in us as we are in them.
Back to the market, and observations. As you may recall, my past several annual letters have been themed with a country western song. This year, I refer to a song by Tracy Byrd: “Ten Rounds with Jose Cuervo”. This song reminds me of the past decade. The singer had a really tough experience (bear market of 2007-2009) that he wants to forget, and does so by visiting a pub:
- “Then after three rounds with Jose Cuervo…I forgot what I came to forget”…(Quantitative Easing 1, 2, 3, by the Federal Reserve, 2008-2014)
- “And after round seven, or was it eight, I bought a round for the whole darn place”…(QE 2019!)
- “And after ten rounds…I lost count and started counting again”…(New all- time highs S&P, DOW, NASDAQ!)
Just a few weeks ago, before coronavirus struck the world, we witnessed new highs in risky assets. At the same time, traditional havens from risk (gold and Treasury bonds) also registered records. This juxtaposition is highly unusual, to say the least.
As for the future, remember what Yogi said…Despite Yogi’s wisdom regarding projections, and knowing that even Methusaleh died, there is one prognostication I am unequivocally willing to make as I enter the twilight of my career. When I reflect upon the founding members of our team, as well as the high quality of character that we have succeeded in adding as we’ve grown, I have paramount confidence in the future of our firm – and most importantly in our capabilities to serve you, our clients, with a rewarding relationship and purposeful stewardship of your assets.
We sincerely thank you for your trust and partnership with Quadrant Private Wealth.
Herman L. Rij, CIMA®