It has been quite the past 12 months on all fronts. On the personal front, this time last year my family and I were finishing up our home remodel, living in a tiny rental, and helping our kids through online, remote learning. The pandemic had slowed the economy but was starting to come back. Nick and I would Zoom each other discussing the insanely high valuations on technology companies while betting the farm that inflation would impact more than just lumber and construction costs. As we begin 2022…

This time last year, I was enjoying a few bluebird days at Bandon Dunes Golf Resort with some dear friends. Little did I realize what would soon ensue. The past 12 months have brought us a global pandemic, wildfires throughout the west, mass unemployment, an upended business environment, huge government financial intervention, social unrest, and a quickly changing landscape on nearly all fronts from healthcare to education to shopping.

Election day is finally here. And regardless of outcome, today feels like one of the final chapters in what has proven to be one of the crazier years in modern history. To say we are living through strange times is a gross understatement. Wildfires throughout the west. Global pandemic. Mass unemployment and an upended business environment. Huge government financial intervention. Social unrest. Quickly changing landscape on nearly all fronts from healthcare to education to shopping. 2020 has at times been exhausting, polarizing and can feel like we have lost control.

These are clearly unprecedented times in nearly every respect. During times of massive change and unknown, it’s important to pause and take stock of ourselves and our guiding principles.

Investors are finally rethinking the economic impact of the Covid-19 virus. As if the voluntary shut down of one of the worlds largest economies wasn’t enough, the news this weekend highlighted outbreaks in Italy and South Korea.

Investing is very similar to golf: both are ultimately a test of patience. The greats practice their craft religiously. And the best are defined not by how good their best shots are, but by how good their bad shots were. The game is ultimately played over 18 holes and rewards consistency and not heroics. Here we see Jason’s oldest son, Christopher, teeing off…and learning that a round of golf is more than just one shot.

We have written extensively about risk, volatility, and valuations over the last several years. From our perspective, it’s important to continually talk about the fundamental values that drive our decision making.

Along those lines, we wanted to share a bit more about the process of evaluating a company and the decision to invest. This quarter, our portfolio manager Nick Fisher walks through his in-depth analysis of Peyto Exploration and Development and why he recently decided to add it to portfolios. Meanwhile, Alex Bridgeman, our newest employee, highlights why a modest allocation to a company like Peyto is a good idea that not every investor is able to make.

2018 had a little bit of everything. The beginning of the year got off to a roaring start with the fresh excitement of the new tax law and corporate tax cuts. But the party was short lived and concern creeped in around both trade and monetary policy. By the end of the year, 90% of global assets had a negative return.