Client Note

My stomach has been receiving steady doses of Pepto this week as I empathize with the stress you are feeling.

 

Three quick comments on the current state of affairs:

(1)  The Russia/Ukraine event has nothing to do with “democracy.” It has to do with energy, which is the lifeblood of the Russian kleptocracy. Russia supplies 40% of Europe’s heating fuel, in the form of natural gas. One of the two aging pipelines through which the gas is transmitted runs through Ukraine, which had lately evinced a growing yearning for increased ties to the West. Putin could never allow this. (See Lukas Alpert’s essay : https://www.marketwatch.com/story/im-a-former-moscow-correspondent-dont-let-vladimir-putin-fool-you-russias-war-in-ukraine-is-only-about-one-thing-11645571878 on MarketWatch.)

 

(2)  At around 4,100, the S&P 500 has experienced a drawdown about equal to its average since 1980. This is not the time to consider abandoning our long-term investment strategy.

 

(3)  At the risk of making a political statement: A great deal of good can come out of all this, if and to the extent that it leads both the United States and Europe to a significant reappraisal of their respective energy policies, to the detriment of Putin’s Russia. My fingers are crossed that wiggle room abates, home and abroad, in the face of this aggression.