Two good quotes from two of the most famous value investors, and ones we’ve referenced many times in our letters and meetings. That first quote by the father of value investing just means that in the short term the stock markets, and the individual companies that make up those markets, are valued hastily by people influenced by their emotions, the media, and their peers. However, over time, as more logical and common sensical evaluation methods are put to work, the true value of those companies and markets are more accurately represented.

Here we find ourselves, past the Ides of March and zooming into a completion of the first quarter of 2025, and I feel that it is necessary to address the current doom and gloom. I know I tend to seek out the better side of things in most scenarios, but I also try to keep my “glass half full” bias in check. While I’m not an alarmist when it comes to prophesying doom, I am quite at home amidst gloom. Last week we were warned of an inclement weather event headed our way over the weekend, with powerful thunderstorms and wind gusts. I know other places had a harsher storm than us, but I found myself happily strolling Main Street with coffee and an umbrella. I love the rain, especially in the morning when it keeps the world dimmer than usual. I perceive those stormy, gloomy morning shrouds as sheltering our protected lives at home and enhancing our rest and dreams.
 
I know the news has been upsetting, and we are now seeing and hearing the words correction, recession, inflation, and bear more than we would wish. It is uncomfortable to say the least, but even more so amidst the overwhelmingly negative political news. Our leaders should be combatting fear, not stoking fires, but both sides seem ready to use any fear that is handy as a weapon to sully the other side. Unfortunately, this seems to be the new normal in the political realm.

Happy New Year! I hope your holidays were joyous and warm, and you’re enthusiastically headed into 2025. Personally, I think things always seem a little frantic at the beginning of a new year. We all have new dreams, but many of us also have new year needs. Our phone usually stays a good bit busier, and the level of paperwork runs a bit higher. This year, a lot of people seem to be starting the new year off with one sickness or another as well. My Christmas was extended for two additional weeks because Carter decided to unveil a fever and cough Christmas morning. That didn’t get in the way of opening presents of course, and he remained excited throughout the holidays, albeit a tad slower than usual.
 
While there is a lot of change in the air, I am still looking forward to a good year. As I’m sure I’ve said countless times, most of us aren’t all that well equipped to enjoy changes from the start. However, even if we continue to hold on to “the good old times” and the way things were, when pressed it’s usually easy to find things we admit are better now because of the changes that occurred.

As unbelievable as it seems to me, Thanksgiving is a little more than a week away. Even though I don’t enjoy the holiday preparation shuffle, especially the effect it has on traffic, I honestly enjoy the lead up to the shared family time as it draws near. I’m excited about the future get-togethers, where we leave most of the world and its problems outside, and selfishly indulge in a time and space created for only our closest family and friends. Those scenes in my mind, either remembered celebrations or imaginings of those to come, are blurry and colorful. The conversations, songs and music, food and favorite drinks mill about in my head without any actual specificity, and I feel that is a testament to their value. The holidays allow us to create surreal sanctuaries in contrast to the chaos of everyday life.

Now I don’t know if it was always so, but I feel having election day this close to Thanksgiving is a disservice to us all. I’ve seen many articles advising people on how not to ruin Thanksgiving dinner because of differing political views, or people calling dinner off altogether. Maybe we should urge our elected officials to change the election calendar to save future holidays. My family is usually well behaved, but I am going to warn them all, if during our meal the conversation starts to turn political, I will take my plate outside with the dogs to eat in peace.

My son, Carter, turns 10 years old on October 29th. Although by my figuring that doesn’t need to be a cause for stress, my wife would not agree with me. So, I too try my best to frantically go about tracking down invitees’ addresses, stamping RSVPs, arranging for the cake pick-up time, and preparing the house for the assault his three cousins from Charleston will soon visit upon us. I am fulfilling my responsibilities with love and excitement, but there is also a nagging regret and guilt for allowing those 10 years to go by so quickly. I can at least do my best to make up in part for any lost time, by joining the typhoon of children as they bowl, play laser tag, and play video games.
 
Another birthday that has recently been all over the news is the two-year birthday of the current Bull Market. Since the bottom of the last bear market in October of 2022, the S&P 500 index is up in price by a little over 60%. I know people wonder how long the good times can continue. If we wanted to compare using statistics, the average bull market lasts about five-and-a-half years and has an average return of close to 180%. Despite those figures, current valuations are stretched for much of the index (companies are expensive by historical comparison), but earnings have been very strong, and large growth in earnings is still expected throughout 2025. Any big negative event could cause a market decline, such as a hard landing for the economy (recession), a return of inflation, or further escalation in the warring countries around the world, but the current U.S. economic fundamentals are still quite strong.

I have a usual process for beginning each day at the office. First, I start off with some kind of procrastination, such as with taking a quick walk, listening to a song that was stuck in my head, or on some special days even taking an early morning pre-work nap! However, I eventually get settled in and start opening up and logging in to all of the programs that I need to do my job. This sounds simple, but logging in to five different websites, each with a different username and password, with most requiring a two-step verification, isn’t easy, especially if my brain and fingers haven’t had time to warm up yet. The worst part of it all, though, is addressing my email mailbox. Each morning, I have at least 50-60 new emails I must wade through to get to the 5-10 I might need. The most important ones are obviously those that come from you all, and I am always worried I’ll miss one when throwing out the unending junk.