Sunlight is the Best Disinfectant
Sunlight is the Best Disinfectant
In our August 2020 newsletter, we warned investors about the increasing popularity of the Special Purpose Acquisition Company, or SPAC. We noted companies that were not yet ready for “prime time” typically used the vehicle in order to bypass the increased scrutiny that occurs when going public through the more traditional Initial Public Offering (IPO) route. The IPOX SPAC Index, designed to track the performance of SPACs, has fallen 46% from its highs. As often happens with the types of low-quality companies that go public through SPACs, the passage of time reveals that the guidance from SPACs was much too aggressive, bordering on fraud in some cases. Eventually, stock prices reflect the reality of a company’s underlying financial condition, which can lead to significant share price declines. Unsurprisingly, that is what has happened with most SPACs. At First Fiduciary, we prefer to invest in high quality companies with good management teams, demonstrated track records of performance and sustainable competitive advantages. Our portfolio companies generate strong cash flow, enabling them to pay dividends and repurchase shares, which helps limit downside during times of market dislocation. Our focus on downside protection has enabled our clients to grow their wealth over time.
Articles We Liked:
Cancer & Fatherhood
A heartfelt look at cancer and fatherhood from a respected sportswriter.
New Cormac McCarthy
Cormac McCarthy, long considered one of America’s greatest writers, will publish two new books this year, his first works in 16 years.
ADHD Drugs
Bloomberg explores the possibility that many venture capital backed medical startups are prescribing ADHD medication to patients without proper standards of care. The consequences for patients could be disastrous.
Art Theft
There is an interesting anecdote in this article about a $65 million art heist. One of the preferred buyers of most stolen artwork is the insurance company that holds a policy on the artwork. It is often far cheaper to pay a reasonable ransom than pay full price on the policy.
Train Wrecks
Now, we watch shows on Netflix for entertainment. In the early 1900s, tens of thousands of people came from far and wide to watch staged train wrecks.
Crypto Collapse
The $60 billion collapse of the cryptocurrency, Luna, shows how dangerous these confidence games can be.
Notable Reads:
The Mechanic’s Tale: Life in the Pit Lanes of Formula One
by Steve Matchett
The book follows the author’s journey from a road car mechanic with BMW and Ferrari to the pinnacle of motorcar racing, as a mechanic for the World Champions of Formula One. Fans of Formula One will enjoy the insider tales, but, unfortunately, be left wanting more. Too much of the book focuses on Matchett’s off-track life and budding career as a writer. – AG
The Psychology of Money: Timeless lessons on wealth, greed, and happiness
by Morgan Housel
Housel’s book is full of interesting anecdotes that he uses to instill useful lessons that could benefit any class of investor, from those just starting out to seasoned veterans. Importantly, this is not a “how to invest” book. Instead, it is a “how to handle your emotions when it comes to investing” book, which is a different yet arguably more important skill when trying to grow wealth over many decades. Unlike other financial writers who try to make investing more complicated than it needs to be, I especially appreciate Housel’s straightforward and plainspoken style. Recommended. – AG
Restaurant Review:
Bloom Plant Based Kitchen
1559 N Milwaukee Ave, Chicago, IL 60622
www.bloompb.com
With a 100% plant based and gluten-free menu, Bloom serves environmentally-friendly and delicious food in an intimate setting. Our meal started with a variety of appetizers, including Bloom’s take on poutine, a hearty & filling dish that satisfied even the non-vegetarians in the party. The Lottery Peppers, Bloom’s spin on stuffed shishito peppers, were also a crowd favorite. The Yuca Gnocchi was a popular entrée choice that did not disappoint. Finally, for dessert, the rich flavor of the Camote Cheesecake, with its sweet potato base and almond crust, ended the evening on a high note. – AG
More Than a Trusted Investment Advisor
Recently, a client reached out to us for help in finding a trustworthy assistant to manage day-to-day financial and personal affairs. We consulted with various contacts, including other clients located in the same city, for referrals. We reviewed and interviewed prospects and identified an excellent candidate with wonderful references. If you have a unique problem, we are here to help!
The data contained within this newsletter is for informational purposes only. The information contained herein should not be considered investment, tax or legal advice.
This newsletter contains links to external third party websites that are not affiliated with First Fiduciary Investment Counsel. FFIC does not control or direct the content of the information contained on these websites. Information contained on the third-party website is relevant on the date the newsletter was published but may be changed or revised by the third parties without the knowledge of and/or notice to FFIC.
Statistics and other information have been compiled from various sources. First Fiduciary Investment Counsel believes the facts and information to be accurate and credible but makes no guarantee to the complete accuracy of this information.
Past performance does not guarantee future results. The mention of securities or types of securities in this newsletter should not be considered as an offer to sell or a solicitation to purchase or sell any securities mentioned. Neither First Fiduciary nor the authors hold positions in any of the stocks mentioned unless otherwise stated.
First Fiduciary Investment Counsel, Inc. is a registered investment adviser with the Securities and Exchange Commission. A more detailed description of the company, its management and practices is contained in its firm brochure document, Form ADV, Part 2. A copy of this form may be received by contacting the company at: 6100 Oak Tree Blvd., Suite 185, Cleveland, OH 44131; Phone: 216.643.9100; Email: ffic@firstfiduciary.com.