Silicon Valley Bank

Did we own any Silicon Valley Bank or Signature Bank stock?  No we did not.  Is the SVB story indicative of system-wide challenges?  We don’t believe so.  Mid-sized and smaller regional banks, which we do own, have neither the assets nor the political connections to command a federal bailout.  Therefore, the smaller banks must be very attentive to asset/liability matching.

The government bailout?  Not a positive in our opinion as it creates or enhances moral hazard, one component of which is lack of accountability for actions.  Business outcomes are nothing more than the net cumulative decisions of groups of people.  When any of us don’t experience the results of our decisions, we miss excellent learning opportunities and short circuit our ability to make improved decisions going forward.

There was a significant sell-off in bank stocks on Monday, a classic human “if this then that” behaviour.  This did impact us since we do own a handful of regional bank stocks.  Oil stocks tanked in March 2020 when the world stopped, creating meaningful buying opportunities.  There may be a few select buying opportunities in bank stocks this week.  We will explore, determine, and take action accordingly.

That’s it for now.  If you would like to visit, reach out.  We always enjoy visiting with you.

Warm regards,

Randy Brunson