March 13, 2020
Dear Fellow Shareholders:
When the equity markets drop significantly, like they have over the past weeks, uncertainty and paranoia can often run rampant. For some investors, the knee jerk reaction is to abandon their equity holdings and seek cover until the storm ends. While it is painful to see stock prices and account balances decline, in our opinion, riding out the storm is the best course of action for long-term investors. Perhaps even better, it may be a good time to add to equity positions as prices are now much lower than they had been. As contrarian investors, we currently see an opportunity to purchase high-quality companies at discounted prices and encourage our investors to stay the course and where appropriate, add to their equity positions.
Five points to keep in mind:
1) Successful investors are long-term oriented. No one knows when this Coronavirus crisis will be over - but it will be over, hopefully soon. In our 50+ years of experience managing other people’s money we’ve seen multiple market downturns. They all end, and we always urge serious investors to remain focused on the long term.
2) A bear market is now underway, and every bear market ends the same way - a new bull market starts.
3) This market collapse has created some great opportunities to buy shares of truly great companies at bargain prices - well below their intrinsic value.
4) We adhere to our moral mandates. Most of our shareholders invest in the Ave Maria Mutual Funds because of what we DON’T do - invest in companies that conflict with their moral beliefs. This will not change.
5) We eat our own cooking. Our portfolio managers have invested in the funds they manage in some very large dollar amounts. Their money is invested along with yours. Many of our senior management team and portfolio managers have recently added to their existing holdings of our equity mutual funds.
As always, thank you for being an Ave Maria Mutual Funds shareholder. Our team is working diligently on your behalf. The trust you have placed in us reinforces our effort to make prudent investment decisions in a morally responsible way. Further thoughts will be included in our regular quarterly market commentary, which will be posted on our website in April.
George P. Schwartz, CFA
Chairman and CEO
Ave Maria Mutual Funds and Schwartz Investment Counsel, Inc.
P.S. My favorite quote from Warren Buffett is, “Be fearful when others are greedy, and be greedy when others are fearful.” What do you think Buffett is doing currently?