By Thomas G. Twombly
March 20, 2020

To all our precious clients and friends,

I am writing to you amid one of the most challenging environments any of us has experienced in a long, long time.

The fact is, in 28 short days our reality has suddenly changed. We must all confront that brutal fact, and not minimize the challenges ahead of us.

In the breathtaking space of just four short weeks, our individual and collective sense of safety, stability and control has been rocked by an accelerating series of events that are shaking the central pillars of our well-being. Our health, our family’s health and security, our daily work and social routines and even our financial stability are all seemingly under siege at once. The resulting feelings are intense.

The most important thing that any of us can do right now is to take a deliberate inventory of our personal situation. What are our strengths? What are our weaknesses? What resources do we have? What resources do we need? What, if any, are the immediate threats we face in the next 12-18 months? What are the real threats we face in the longer term?

Please know that we are here for you, ready to have those discussions if you would like to give us a call.

Critically, it’s very important that we not be blinded by fear, and that we also ask ourselves what opportunities might emerge from this “crisis?” (Recall from one of my previous missives that the written Chinese symbol for crisis is a combination of two – one for danger, the other for opportunity.)

From strictly a financial perspective, keep the following things in mind: for every single stock or bond urgently and anxiously being sold in this fear-filled environment, there is someone out there buying it. The people who are adding to portfolios at these levels (some of whom are colleagues and clients) believe wholeheartedly that they are acquiring valuable long-term investments at very attractive prices. Hold fast to a long-term faith that things will eventually improve. It always takes courage to buy when others are urgently and anxiously selling, because this mood, right now, is what buying low feels like.

As you might imagine, we have had any number of crucial conversations with clients, colleagues, family and friends in the last couple of weeks. Most of them have started with concerns about not knowing what to do or what, even, to think. Some have expressed feelings of being frozen, unsure, and incapable of making any confident decisions in an environment where they’re being whipped back and forth daily between faith and fear, and where the pace of change being imposed upon all of us is beyond our capacity to process. It’s exhausting, I know, but I’m convinced that in the fullness of time this will pass – just as all past crises have eventually passed.

Our advice in all those conversations, and my encouragement to you now, is not to center first on what to think or what to do – but to focus your attention on how to think.

Think slow. Think controlled. Think strategically. Take a deep breath and quickly determine what, if anything, you should do right now to fix a weakness if need be – but don’t stop there. Go to the other end – the long view on the far side of this crisis – and then work your way back from a position of clarity, purpose and preparedness.

I’ve always thought of this concept as “working the maze backwards.” (My sister said I was “cheating” when I did this every month as kids when the maze in Highlights magazine showed up in the mailbox.) The analogy still works very well now. When I confront a situation with many challenges to solve, I still try to start, figuratively speaking, in the center of that maze in front of me. I discipline my mind to work my way out of that maze with a pencil first. After that, I have a much clearer idea of which dead ends not to take, and which path I can more confidently follow as I then work my way forwards with a pen.

At Lucien, Stirling & Gray we have taken a careful inventory. We’re facing the tough facts ourselves and making necessary changes to our personal plans and to our daily business operations – because our individual and collective situations have changed dramatically too.

One of our strengths is the decades of experience all our senior team members have. We have been through brutally challenging environments before – and we’ve done it together. We trust each other and we trust our processes, precisely because we’ve been sorely tested in the past. We’re also investors ourselves and, to a person, we practice personal fiscal discipline. We will undoubtedly suffer for a period of time in this environment, just as our clients’ portfolios will suffer, but we will be fine.

For the younger members of this team who have never experienced something like this, we are sharing our experiences and our confidence. I have met with all of them. I have assured all of them that their jobs are secure, their incomes safe and their health insurance premiums will continue to be paid. We have always run this business very conservatively. We have no debt, and we have maintained a substantial cash cushion for many, many years precisely so we would be prepared in the event of a severe and unexpected setback. In other words, we practice what we preach. As a business, we’re solid.

Like almost all of you, however, we also have close relatives that are particularly impacted by recent developments. Several of us have older parents who are self-isolating and loved ones in assisted living facilities who are vulnerable and whom we are no longer allowed or advised to visit. Others of us have school-aged children who have been sent home for the remainder of the spring, and now need parental supervision. Still others have very young kids whose day care facilities have now closed indefinitely, and a few of us have young adult children working in service positions that are being eliminated, or for small companies that may be forced to lay them off in the future. It is indeed a challenging time.

In response, like a great many other companies in this country, we have quickly implemented work-from-home procedures in order to see this through. All our team now has the capability of working remotely and sharing both information and responsibilities in a secure on-line environment, so irrespective of the challenges to come we promise to be here to serve your needs.

While all this is new, and while I’m sure it will take some practice to perfect, I have no doubt whatsoever that this experience will make us all stronger, more resilient and more adaptable in the long run.

Thank you, again, for all the confidence and trust you have placed in us. We sincerely appreciate all the calls we have received recently inquiring as to how we’re holding up in this storm, and we’re tickled pink that a couple of wonderful clients have sent us warm cookies in the last few days. How great is that?!

We truly have much to be grateful for.

Thomas G. Twombly