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Some tough months ahead

| December 08, 2020

The first day of winter is coming up in a couple weeks, but Wave 3 of COVID is well under way and shows few signs of relenting here in the US. I don’t want to talk too much about that, aside from saying that there will likely have to be some stimulus from the Federal Government to help people and business bridge the gap. When and how much are the key questions now, and clarity on these is hard to come by.

Shutdowns have started in many areas of the country and many more areas will likely experience them over the next couple months. Restrictions here in Washington just got extended to January 4th, and our best guess looking at the situation today is that they will be extended through January (uncertainty is a theme here).

The good news is that the vaccine will likely start to be rolled out in the next couple of weeks. In fact, it started today the UK, with 90-year-old retired jeweler Margaret Keenan becoming the first non-trial subject to receive a dose. File that name away for when trivia at the local pub resumes thanks to a successful vaccination campaign! This pending rollout should help to start bending the curve, albeit slowly at the beginning. Coming back to that uncertainty theme, we really don’t know yet when, or even if, the vaccines will truly bend the curve to where a return to “normal” is in reach. We certainly hope the promising trial data translates to success in the field, but that is far from certain. It’s a monumental task to get an entire world vaccinated, especially with a novel set of vaccines. Questions that still remain are how quickly can we logistically get vaccines out to the broad population, what will the uptake rate be, and how long will the vaccine be effective? From what we’ve heard, it will likely be more like the flu vaccine than a polio vaccine. We will see.

Somehow the market is still looking through this wave and these clouds of uncertainty to the other side and seems to want to move higher. A lot of good news is priced in right now, so we’ll need to see follow through or else we may see a significant correction (example: failure on the vaccination front). 

We continue to see a broadening out of the market with small outperforming large, value outperforming growth, and international outperforming U.S. That is a good thing, and we think there is a lot of room for the markets to run if we continue to get this broadening out.

Lastly, we haven’t talked much about this for a while, but the best performing asset of the year is Bitcoin, and more broadly Cryptocurrency. This is still very new (think the internet in the early 90s).

There is a first of its kind index fund coming out on Wednesday that invests in the top 10 cryptos in the market and then rebalances on a monthly basis. For many of us, we don’t really understand what crypto is or what it does, but speaking for myself, I didn’t really get the internet and all that it meant back in the day. We are doing our best here at MPCA to understand this emergent technology and will explore ways to invest in it when the right opportunities emerge. We continue to believe that blockchain is a revolutionary technology and will fundamentally change how we handle tech going forward. Here is the latest headline that speaks to that change. Visa is partnering with a startup that uses blockchain on the Ethereum network (like anyone knows what that means 😊).

Lastly, here’s one we never expected to be discussing at the outset of this year – saving the venerable Maltby Café. However, after all this year has dealt them, this iconic cinnamon roll locale is struggling to stay afloat, and they are inviting our help. They started a GoFundMe page and they have had tremendous support. If you haven’t had one of their cinnamon rolls, you’re missing out. If you feel like you want to help them out, they have been really busy with takeout orders or you could go to their GoFundMe page here. Yes, this is a bit self-serving…as I don’t want to see my favorite cinnamon roll dispensary removed from the map. 2020 has brought enough destruction as it is!

As always, we welcome your comments and questions. Here’s to a great December. The end of a tough year. Let’s finish on a good note!