This eventful, unprecedented, horrific, contentious, resilient and record-breaking year of 2020 is coming to an end. The number of topics for discussion in summary are vast. I’ve done my best to chronicle the year over the course of the days, weeks and months, which have provided more material than any year I can remember. This New Year’s Eve feels so different from any which have come before.
There’s not much of a change to the broader Market narrative headed into 2021, though the rising political uncertainty given tightening Senate races in Georgia is the biggest unknown headed into January. There hasn’t been much of a Market reaction as a Democrat-controlled Congress would likely lead to larger stimulus, but the prospect of tax increases has been an overhang given the potential earnings impact. The recent polls indicate the Democrats are in the lead in Georgia. The Market and the betting odds seem to reflect a win for the Republicans. The failure of the $2,000 stimulus checks in the Senate also didn’t have much of a Market impact, though it certainly would be meaningful to millions of Americans.
Brexit is finally happening. After 4 ½ years, 2 general elections and countless missed deadlines, Great Britain is trying to finally close the book on Brexit. The UK House of Lords officially gave the green light to Prime Minister Boris Johnson’s post-Brexit trade deal, just 24 hours before the country’s formal split from the European Union. As this new story begins, several risks remain for the United Kingdom. Negotiations on service industries have been moving slowly, while border bureaucracy, new paperwork and regulatory cooperation can still cause disruption. Expect the bumps to continue. But the British have finally exited the European Union, on a new path in 2021.
France has resumed collecting those digital-services taxes on the American Tech Titans. Italy and Great Britain are expected to follow. A year ago, France hit Google, Amazon, and Facebook with a digital tax that equaled 3% of digital revenue for companies with more than €750 Million in annual sales. In response, the US threatened to put tariffs of up to 100% on $2.4 Billion of French imports, but earlier this year, the parties reached a truce. The US will respond with tariffs on $1.3 Billion of French imports, setting up a renewed trade spat over digital taxes for the incoming Biden administration. If you’re planning to pop French bubbly tonight, savor it. The price of Champagne is about to go up.
Despite the chaos and crisis with the virus, it was a record year for the US Stock Market. It’s been a crazy past 12 months for equities, which started the year at records, followed by a violent Bear Market crash, followed by another record high. High-flying IPOs soared. Over 10 Million new investors opened brokerage accounts in 2020 for the first time. That was also a record. The Stock Market partied like few others in 2020.
As most of you know, I have been writing a daily update since the shelter-in-place ordinance was implemented in mid-March. It’s been 290 days. So much has happened during this time. 2020 has been as eventful of a year as any of us can imagine. Of course it will be remembered for the global pandemic. The contentious Presidential election will not soon be forgotten either. It was a year that saw the Olympics canceled for the first time since the Second World War. Airplanes were grounded for an extended period. Cruise ships remained at port. Schools went virtual. I’m unaware of anyone who is not ready to put 2020 permanently back in hindsight.
2020 will also be remembered for the heroic efforts of our medical professionals. The health care system has been tested and under constant stress for extended periods of time. Unfortunately, it’s happening again right now. The system and its people are exhausted. 2020 has to also be remembered for the first responders and essential workers in every industry who risked their livelihoods with a commitment to the service of others. Operation Warp Speed brought vaccines to the people faster than anyone imagined. For the first time in decades, American Astronauts went to space from American soil. Science continues to win the day, and the year.
I finish the year, and my daily updates in 2020, by recirculating a piece I wrote in August titled “A Little Something Different.” This piece received the largest number of replies, by a wide margin. I was touched and very humbled. As I’ve said on numerous occasions, Bedell Frazier is in the Business of Life. This is a relationship business. We’ve been through so much together this year. I have tried to be an open book as I’ve written the story of 2020. It’s generally been a chronicle of Market activity and investment themes, but one of the things I enjoy most about the Market and this business is that I need to constantly have my finger on the pulse of Planet Earth. And I get to work with and for really good people. That’s you, each and every one of you. It’s been an emotional year, an emotional journey. On that warm Summer day, I felt compelled to share my thoughts about life, my family and the path for a better tomorrow. It was a human story. Sometimes lost in the shuffle in this Digital Age is the reminder that priorities and perspectives almost always come down to people. To me, that’s what matters most.
Have a nice weekend. We wish you a Happy New Year. Stay healthy. Stay safe.
We will be back, dark and early, on Monday, in 2021.
A Little Something Different
August 12, 2020
Hi. It’s me again.
23 years ago today, I lost my sister to cancer. She had glioblastoma. She was given 18 months. She was taken in 18 months. She was 27. She has been gone almost as long as she was here. I will never forget these words from my mom: “It’s a parent’s worst nightmare to outlive their child.” It was clear to me then. It’s even more clear now.
My sister probably wouldn’t recognize today’s world. Both the web and mobile phones were in early expansion in 1997. Answering machines were still in every home. The iPhone certainly didn’t exist. Steve Jobs returned to Apple that year. Google was still a startup. Facebook wasn’t even a Harvard dorm room idea yet. Titanic was in theaters. She passed away 4 years before September 11th. Air travel was quite different back then. Trips were booked with travel agents. Some hotels still used keys.
The Digital Age has brought so many luxuries and conveniences. Communication and commerce have never been easier. The word progress is used often. But the human element of life can often erode. Expectations have become immediate today, no matter the topic. Patience often lacks too.
We all continue to evolve. Over the years, we have made substantial investments in systems and software to enhance our business and improve our service. It is essential in the Digital Age. But so important to me is our investment in people. There is no digital replacement for hard-working individuals with great integrity, a smiling face and the attitude of whatever it takes. We are financial first responders. That’s our way. It’s a big part of our brand.
I thought I would share a snippet from my daily internal Morning Brief that I sent to our team this morning:
Take on life with purpose. Because you never know what’s coming on the other side. But if you pay attention and anticipate with a well-thought-out action plan and go after it with conviction, your chances of success go up. Making mistakes and learning from them is part of the process. Stretch your comfort level. Greatness is never achieved when comfortable. Push yourself. Push others. Believe in you. Believe in us. Attitude is everything.
Life presents challenges. 2020 has no peer. We the people are dealing with so many challenges today. Dealing with the challenges and ultimately succeeding takes a lot. It takes guts. It takes commitment. It takes vision. It takes integrity. It takes honesty. It takes a positive attitude. It takes tenacity. It takes action. It takes accountability. It takes a team. Attitude is everything. Positivity and strength is infectious. Honesty, transparency and accountability form strong bonds. It is a relationship business you have chosen. Know your audience. Bedell Frazier is in the Business of Life. Really, truly understanding this is everything.
I have been writing to you on a daily basis for 149 days. Many of you write back and write back often. We sure have been through a lot together, this unique year and beyond. I’m often told I’m a voice of clarity and sanity amongst the confusion and chaos. I usually write about the Market and the Economy. I cover politics and innovative investment themes. But all the while, I try to tell a story. It’s a story about us. The collective us. You, me, all of us. It’s what we are doing, what we are seeing, what we are hearing, what we are experiencing and most importantly; Where we see things going. Planet Earth is a complex place. Today, I wanted to tell a human story. Those are the most interesting to me, and those that matter most.
I don’t think my sister would’ve cared for 2020 much. Who could blame her. But she rose to challenges as do we. The alternative is simply not an option. When I say we are in this together, I mean it with complete sincerity. There will be many challenges ahead. It’s part of life. We are in the Business of Life. We are with you every step of the way.
P.S. I do think my sister would have loved to get to know my wife and 3 daughters. Scratch that. I just know it.