© Morgan Stanley Smith Barney LLC. Member SIPC.
28 State Street
Boston, MA 02109
TO CLIENTS AND FRIENDS
I’ve written these memos for many years. They tend to have familiar themes. They may be easier to follow if they’re in bullet point form. Our game plan, I hope, follows history, common sense, and basic rules for financial sanity and wisdom. These rules, I believe, can serve us all well in money matters and in life decisions as well.
We did steer away over the last several years from the mania in fad stocks and meme stocks, and crypto. The mania grew out of record low interest rates and gave rise to intense speculation. Through it all, we stuck to our guns of value and dividends. This has cushioned us from many of the extreme punishment that has taken place in what were the darlings of that inflated time.
• Be a contrarian. Don’t follow the crowd.
• Beware of fads. Buy companies with strong financials and with profits.
• Be a long-term thinker, not quarter to quarter.
• Don’t be an obsessive headline reader unless you actually know what’s behind the headlines.
• Human nature never changes, regardless of what storms are swirling around us.
• Fear and greed are immutable.
• When we get markets where every sector is being punished, like now, that’s when bargains appear.
• Cycles in the economy are also immutable. There are times when real estate prices seem extremely
high, and other times when it’s tough to find buyers. With mortgage rates now around 6%, look for a
slowdown in prices.
• Dividends really do matter. The cash flow clients get from dividends are important to all of you. We
continue to stress this theme. You’ll get income even in down markets.
• Be disciplined in bear markets. Buy new positions slowly and add to them on weakness to lower your
• In bear markets we make lists; what ten companies do we really want to own for clients that we feel
will be rewarding for the future? And what prices are we willing to pay?
• Scared money never wins.
We have a plan for your immediate needs which will buy us the time for the next bull market to
emerge. And throughout history, it always has. As I write this, I’m looking out the window in my office. We overlook Boston Harbor and the North End of Boston. The North End is one of the oldest neighborhoods in America and shows me a setting, our history, including the old North Church, that reflects the beginnings of the American Revolution. This setting is still here. So will be the foundations of our entrepreneurial nation. This spirit has created the innovations that will drive us into the future. This means technology, cures for disease, new forms of entertainment, and reforms in education.
The Dow Jones Average when I began my investment career was 680. Today, it’s just about 30,000, despite endless wars, panics, unpopular administrations, and uncivil discourse. What we’re seeing now is a scary blip that to us represents opportunity if we’re patient and are invested in the areas that seem attractive to us.
Enjoy the summer. Get outside. Consider yourselves lucky.
John D. Spooner
The Spooner Group
The views expressed herein are those of the author and do not necessarily reflect the views of Morgan Stanley Wealth Management or its affiliates. All opinions are subject to change without notice. Neither the information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results.
This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this material may not be appropriate for all investors. Morgan Stanley Wealth Management recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Financial Advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.
The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry. An investment cannot be made directly in a market index.
Morgan Stanley Smith Barney LLC. Member SIPC.
CRC 4801621 06/2022