I sent the following letter earlier today.
My fellow Mayar partners,
We don’t usually comment on specific news events, especially in the middle of the quarter, but I’ve received questions from some of you and I want to communicate with all of you at the same time so here are my thoughts on Trump winning the US presidential elections:
- While I believed that the probability of him winning was greater than what the polls were suggesting, this was a surprise for pretty much everyone–myself included.
- The markets’ first reaction to a potential Trump win was very negative, especially late in the night. As the day progressed and the maturity of his victory speech was digested , cooler heads prevailed. However, I would not be surprised if we see more volatility in coming days and weeks.
- I am especially saddened by the fashion that this US Presidential election was won. I hope that future political leaders in the United States and elsewhere don’t view Trump’s win as a moral license to behave in a fashion similar to his or, worse, as an election blueprint to emulate.
- The United States is a great country of laws, checks, and balances. No one person, including the President, can single-handedly change things as they please; even someone as energetic as Trump.
- I don’t believe that having Trump as President of the United States, in and of itself, will be harmful to the intrinsic value our investments over the next few years. In the near term, I believe our capital is safe. Though as mentioned, I worry about the lesson future politicians everywhere might learn from this election.
- The success of our investments rests on a small set of assumptions, that’s how we’ve always chosen to invest. I quote from our last annual report: “all we need is for teeth to be brushed, hair shampooed, television watched, clothes washed, coffee brewed, websites browsed, houses inhabited, and diamonds to remain a girl’s best friend.”
- At the time of this writing, we hold relatively high cash balances (more than X% of Fund assets). We will be careful in how we deploy it. Though as you expect, we have our “wish list” and are ready to take advantage of opportunities that may arise from market volatility.
November 9, 2016