President’s Message

Article By Thomas Twombly
Artwork by Daisy Lopez, Staff Accountant

“There are two kinds of forecasters: those who don’t know, and those who don’t know they don’t know.”
– John Kenneth Galbraith

I came across this quote in the first couple of years of my career, when I was pretty sure I knew nothing about economic forecasting, so I decided I had no choice but to plant my flag proudly in the first camp. In the 35 years or so that have elapsed since then, I haven’t encountered anything new that dissuades me from thinking that initial assessment has changed. I still don’t know anything for sure.

That doesn’t mean I don’t try to forecast. I own and lead a business. I have to plan for the future, and forecasting is a necessary evil in that process. It helps to inform me if I can hire someone or not, whether I can confidently award raises or not, and how wise it is to commit a greater portion of our budget to new long-term initiatives. I also advise clients, and I mentor colleagues in the art of providing personal advice concerning long-term financial decisions, and forecasting is a central part of that, too.

What it does mean is that I have learned to forecast with humility, to accept my limitations, to embrace ambiguity and uncertainty, to expect the unexpected, and to remind myself constantly of the old saw that, “if you want to make God laugh, tell him your plans.” (My other favored reminder is a somewhat tougher quip from Mike Tyson: “everyone has a plan ‘till I punch him in the mouth.”)

Planning and forecasting for me is all about preparing for a range of things that might happen, and not about predicting exactly how and when they will play out. It’s a way of defining and testing my most important objectives on the one hand, and then on the other hand coming to close grips with all of the things that might go wrong to keep me from achieving those objectives. It’s a way of accounting for all my resources, and then screwing up my pugnacious determination in advance to improvise, adapt and overcome when things inevitably don’t go as I expected. And that’s not limited to economics.

Last quarter in my “Uncharted Territory” piece for our Quarterly Report I wrote about the Lewis & Clark expedition, and the 8000 miles of completely unknown and unmapped wilderness they successfully traversed over the course of 1805 and 1806. It was an analogy for where we all find ourselves now.

I lit on that topic because some good friends and I (a group, by the way, that refers to itself appropriately as the “Plan B Paddlers”) were planning a 7-day canoe expedition down part of the route that Lewis & Clark took along the Upper Missouri River in present day Montana, and the preparatory reading I had done for that trip struck a chord. A number of our clients subsequently reached out wishing me good luck and encouraging me to keep a journal and share some experiences on our return. Here are a few of the pertinent take-aways.

Foremost, this adventure was a phenomenal investment in my sense of wealth and well-being. Seven days and six nights in such a wild and scenic place without a single email, text message, telephone call, or anxiety-laden newspaper, website, or newscast does wonders for restoring the soul – especially after the last 17 months. To experience that in the close company of a handful of wise, trustworthy, interesting, engaging, well-read conversationalists who also treasure the outdoors is truly precious. And nothing beats wide-open spaces, sleeping under the stars, and daily physical exertion to lift the spirit.

But nothing was easy about escaping modernity, and all our plans went awry fast. Just to get there was a (now) comical ordeal of cancelled flights, suddenly decommissioned planes, creative re-routing from Great Falls to Helena, lost baggage, a disappearing baggage agent, a last-minute trip to a sporting goods mega-store to re-equip, and then paying some guy and his grandson for an improvised 3½ hour trek across the state in his dusty pickup truck to overcome the airline’s incompetence. Stress.

The river was a different world. Not once did I ever see a single piece of trash, in the water or on the bank, for the entire 107 miles we paddled. Bald eagles were everywhere, soaring and circling above us in the updrafts, perched in the shade high along the eerily eroded cliffs, or watching like sentinels from the uppermost branches of gnarly old cottonwoods. Contrary to expectations, at least for the first half of the trip, the water was clear. We saw big fish everywhere. I missed it, but a couple of the others were startled as a Shovel-nosed Sturgeon half the length of their canoe swam beneath them. The current was a steady 4-5 miles an hour, reminding me how glad I was to be paddling downstream instead of hauling a fully loaded keelboat upstream, as the grunts in the Corps of Discovery had done over 200 years ago. At times we just drifted, silent and still as the current carried us along, eyeing the distant cliffs and crags above through binoculars for occasional views of elusive Desert Big Horn sheep. It made me sad to know that the lower banks had once been filled with millions of Buffalo.

We had expected warm days and chilly nights, as is normal for northern Montana at that time of year. In preparation, my friend Mark “The Canoe Sherpa”, had loaded his special trailer with 100 lbs. of split Texas oak for firewood – along with all our gear and three canoes – and hauled it all the way from Austin. We packed that wood in a dry box in my canoe. But the weather that week turned out to be hotter than it was in Texas, and 100° days gave way to very sultry evenings. We never had a single campfire.

We stayed in four spots along the way that were original Lewis & Clark campsites. The most memorable was a site called McGarry Bar. The stars were bright when we turned in, like every other night, so none of us put a rain fly on our tents – it was too hot not to let the breeze in. Besides, when we’d left civilization 4 days earlier my iPhone had forecast nothing but clear skies. But at 2:15 am we awoke to chilly winds, rolling thunder, and lightning over the hills behind us. We barely had time to adapt before the skies opened up in one of the worst thunderstorms I’ve experienced. 3 hours of crashing thunder, hair raising lightening, driving rain and wind gusts that threatened to collapse our tents reinforced our ultimate powerlessness. All we could hope to do was hunker down and endure. And the next day we had to call an audible and layover another day just to dry out. We strung paracord between two cottonwoods and hung up our wet clothes and sleeping bags. Mark hung his entire tent from a stout branch and let it billow, kite-like, in the wind.

Our lives and our financial lives are no different. There are times of great wonder and reward, and other times of trial and fearsome challenge. For the unprepared or for the foolishly overconfident, sudden change provokes panic. 20/20 hindsight leads to recriminations and envy in the undisciplined and impatient. But the truth is that nobody truly knows what the future holds. So, for all their obvious limitations, a well thought out plan, a purposefully diverse reservoir of resources, and a deliberately resilient attitude are the only ways I know to succeed and prosper in the long run.

Thank you for your confidence and trust

Thomas G. Twombly
President