Response to COVID-19

Response to Virus

In early 1918, as World War 1 ravaged on, the world was struck by one of the most deadly epidemics of human existence. Second only to The Black Death, the 1918 Flu Pandemic took the lives of more than 20 million people in a manner of 2 years.

What led to such a high mortality rate was the increasing amount of movement by soldiers during World War 1, who found themselves crossing through multiple camps filled with hundreds of thousands of soldiers and thereby transmitting the disease to a vast amount of people at one time. Eventually spreading at unprecedented rates, the Spanish Flu, as it was improperly called, infected almost 500 million people.

While the poor living conditions and a lack of medical advancements helped in the rapid spreading of the disease, the most harmful factor was the large gatherings humans continued to have despite the spread of the flu. Had the population been warned to stay away from large gatherings as to decrease the likelihood of the disease spreading, the destruction brought on by the Flu Pandemic of 1918 would have been far less.

It is therefore our responsibility as a civilization to learn from past events and implement now what should have been implemented then. At times like these the words of Santayana could not be more important: Those who do not learn history are doomed to repeat it.

Update on Investment

In terms of the financial markets that have suffered as a result of these events, and the investment you have entrusted to your managing partner, all the news I have to report is that of a positive nature. While at first glance it may appear that the virus is bringing downfall to the equities market, the rational investor will take a step back and understand that it is the widespread panic causing such turbulence rather than the spread of the virus; and as all investors will acknowledge, panic provides opportunity.

As a wide mass of selling has taken place, the prices of equities have been driven down substantially, all the while their value remains very much intact. This of course presents many opportunities for the purchaser of common stock to obtain quality businesses at quality prices, and I am pleased to report that your managing partner continues to do so. More specific details regarding activities of the fund will be presented in the annual letter sent to investors at the end of the year but partners of the fund should rest assured that their investment remains safe.

I would like to note however, that my responsibility to provide superior returns does not eclipse my sympathy for those having to suffer through these hard times. While I aim to assure you with this letter that your investment remains safe, I also aim to encourage you to provide assistance in any way possible to those in need. Below you will find a link to a donation page meant to help those around the world in need of support.

COVID-19 Response Fund

If you have any questions or concerns I welcome you to contact me at any time.

Your managing partner,

William E. Douthat

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