Tell The Truth: E-mail I sent to Client’s Last Night at 9:28PM MST

Last night on March 15th at 9:28PM MST, I wrote this e-mail to clients. I want to share it with you. It’s our job to tell the truth, no matter what.
My only goal is to help educate you on what I think. All my peers over the past week said I’ve been overreacting.

I hope that to be true. So far, it’s not been.



Heard ’em say
For the last week and a half, I’ve been talking to billion dollar PM institutional investors, large commercial brokers, peers who run other local investment shops, medical staff in multiple states, virologists, and other unique thinkers.
I’ve also been obsessively reading different disciplines, and sources too.

So, I really hate typing this, and hope to be overreacting.
I am getting concerned.

In my view “underreacting” is just as bad as overreacting.
Like the medical response.

Some peers think I am paranoid
I prefer prudent. I’m sure as hell not omniscient either.
So of course, I get stuff wrong, and of course I update my views.



Here’s what I’m thinking about and my opinions:

  • Why are we all reacting so differently? We’ve never been so divided…
    • It feels like different information and biases have never been greater; there are endless channels to get fed information and misinformation.
    • Who is going to stop the tragedy of the commons with lack of social distancing? And just how hard will they really crack down on keeping everyone isolated?
      • Why were so many millennials out for Saint Patrick’s day, and at concerts? Brunch? Bars?
        • Looks like they won’t die, but they could carry the virus though, and take down our medical infrastructure with the vulnerable that pick it up. Is this okay? Who will be next after New York to start the bans?
      • Why are different communities, states, and countries thinking about this so differently?
        • The U.K wants to spread it everywhere, South Korea appears to be on the downhill. Why?
    • Generationally, many people are interpreting things differently: some people think it’s no big deal, others are deeply concerned.
    • State-by-state the reaction is different based on local politics, weather/climate, outbreak cases, density and population, local business sector concentration, and other factors.
    • Political affiliation, some are left, right, independent, and dogmatic, but what I really see is a serious lack of coordination.
      • Can or will anyone rally them together? We’d love that.
    • Scientists and labs, why are scientists and labs not coordinating resources, and offering prizes for a cure? A billion dollars? We’d pay it.
      • But, without price money, does this shed light on just how hard a possible cure might be? Is it too hard to get something in the timeline we really need it for? Clapping loud for our labs, American entrepreneurship, and luck!


  • Where’d all the liquidity go?
    • Treasury markets are seriously lacking liquidity; even institutional investors are getting poor pricing: large bid-ask spreads.
      • Rates are whip sawing;
    • ETFs are lacking liquidity too, and having issues versus mutual funds, because they need to exchange whole baskets that include illiquid assets, and not just redemptions for cash, like in mutual funds.
    • Spreads are widening in high yield bonds.
    • Hedge funds highly leveraged are starting to close.
    • Fed just slashed rates to 0%, and all the new QE, but will it be enough?
      • Fed does not have legal authority to buy the stock market….yet….But, could they “shut down” the market? I’m not sure. It’s been floated.
        • I really hope neither.


  • Who will bail them all out?
    • The second, third, forth, and fifth effects
      • Fed cannot really reach ALL the small business community. Can they? Bars, restaurants, gyms, yoga, product companies that need Chinese supplies? Then, the building owners who collect rents? And banks who finance those buildings, and businesses?
      • What about 3/4s of society that doesn’t have an adequate emergency fund? People who have less than $1,000? That NEED to work. Hand to mouth folks.
        • What about the kids who rely on free, and reduced lunch? Their parents working three jobs. If they have no money, what will they do to survive?
      • How long will effects like these linger? When are we in the clear from these?


  • What am I most focused on?
    • Not (just) financial markets.
      • The financial markets are lagging right now, in my view, and according to the Fed: The outbreak is leading everything.
      • Exponential effects: As humans it’s hard to think outside of 1-by-1 linear thinking, but things appear to be reacting exponentially. The virus spread. Capital markets drawdowns. Fear. What else is next?
      • I’ve been focused on how fast we are tracking Italy’s timeline, some of my opinions from this post follow.
          • Steps based on Italian trajectory (re-mixed, edited, and summarized from post)
            1. Coronavirus starts, people say it’s just a bad flu
              1. Why are people freaking out, buying masks, and toilet paper?
                1. Cases are start to get significant, but still meeting with friends, many wonder why are people so worried?
            2. Schools and universities start to close
              1. Red zones along with a quarantine of one or two cities where they found first cases start
            3. National health emergency next, then, hospitals at capacity, entire units are cleared to make space
              1. Not enough doctors and nurses though
            4. Doctors and nurses start getting sick, and have to make a determination on who lives and dies
              1. Trauma/stroke patients compete for care in ICU
            5. Shut it all down: Now you have security checkpoints, air travel, without a reason to be on a road you risk a fine
              1. Now bars, restaurants, and shopping are closed too
              2. Grocery shopping and pharmacy stay open, but you can’t travel unless you have a valid reason
            6. Higher authoritarian rule, and local police and military support to enforce curfew
              1. If you are out and a positive test to the virus, you risk jail time  (God, I hope I am wrong)
      • I’ve also been focused on just how fast the current medical infrastructure will start to crack: beds per thousand versus outbreaks in states; if we get into a scenario where people are dying in waiting rooms and how this would effect investor sentiment. 
      • I’m listening to the following a little closer on twitter, these are separate from the Virologist I interviewed. They are not gospel either.
      • Give us good news! Lastly, where and what are the positive catalysts? Effective deployment of medical tests? Early treatment? A combination of self-immunity? A tested vaccine that works? 3D printers for medical supplies? Hotels and other buildings converted for medical support? What else? Who can bring confidence back? Or, are some of these effects too hard to overcome?


What do you think?
You might be reading this and disagree with me.
You might think this will all blow over. it’s hysteria for no good reason.
You might have questions.
You might have ideas.

I’d love to talk to you.
I am here.

Let’s not act in fear, but talk about your specific options.


Let’s talk 

  1. Of course I’m a long-term investor, but we always have choices.
    1. Options to reduce future regret.
      1. Please book a time ASAP 
  2. I don’t want to outline various options here.
    1. They are custom to each client depending on way too many factors.
    2. If I don’t hear from you, I have discretion to act what I feel is in your best interest based on the information I have and what I know about your family. Which may be no action too.
      1. But, I’d like your input, please collaborate with me, so I can understand how you feel too before acting.



Hi there reader, yes you, If you need someone to talk too, respond to my e-mail ASAP.
My clients come first, but if we have time, we’d love to help you if we can.