We're Optimists
Despite the political grumblings that seem to be a constant in America now, there is one thing that we’re known for: our optimism. Optimism is what has been a driving force for generations, fighting for independence from Britain; crafting a living constitution; believing that every person is created equal; defeating fascism; putting humans on the moon and the list goes on and on. That can-do attitude has made us who we are, for both good and bad.
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I believe this sense of optimism is why we’ve seen the equity markets stabilize over the past several weeks after its initial decline. We believe that we can engineer ourselves out of this pandemic and back to business as usual. And the reality is that with so many scientific resources being focused on vaccines, treatments and simply understanding the virus, there is a distinct possibility that we will come up with a solution faster than the original estimate of eighteen months.
But there is a fundamental problem with optimism when it comes to issues like the pandemic or climate change: it can’t be relied upon. Don’t get me wrong, I’m an optimist and believe in the power of positive thinking. But I also understand that often we need to be proactive rather than reactive.
I have a feeling that many people view climate change the same way. We’ll engineer our way out of it. We’re seeing now that engineering our way out of a pandemic is quite difficult and is having a negative impact on communities, economies and of course human lives. While we may not have been able to prevent the pandemic, we certainly could have planned better.
And we have a very small window still to cushion the worst effects of climate change, to be proactive in our thinking. The opportunity is definitely here as the disruption from the pandemic is an ideal time to shift the paradigm. We need to innovate our economic and educational systems. Transform our consumer culture and move to a more circular economy focused on the basics with the goal of raising all of humanity up in a sustainable way. And making sure to protect our fragile and failing ecosystems.
Let’s be optimistic that a paradigm shift is possible. That we can proactively work together to overcome the biggest challenge humanity has ever seen in climate change. Let’s use this time of pandemic to take a serious look at how to overcome business as usual and plan for a sustainable next economy.
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I wanted to share this article that just came out. I was recently interviewed by Brian Liechti who is Director of Admissions at Warren Wilson College and an MBA candidate in the Bard Sustainable MBA program. The interview is part of the UN's AIM2Flourish project, launched to celebrate business innovations for global good.
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On to business…
We’ve seen more volatility in the equity markets over the last week. I think people are finally realizing that getting back to “normal” is going to take longer than their optimistic predictions. Right from the start, we made the decision to move our diversified mutual fund models to a capital preservation stance. We believed (and still do) that there is no easy fix for this situation, that it would take many months before things normalized and that the best option is simply to move to a much more conservative allocation.
We have no changes scheduled to the mutual fund models. At this point, it is simply a matter of keeping an eye on the economy (unemployment, company reports and other metrics), the growth rate of infections and recoveries, medical advances and governmental stimulus.
I continue to spend most of my time working on the Green Sage Sustainability Portfolio mid-year reconstitution and rebalance. I started out with 503 possible companies and have narrowed it down to 100 as of this afternoon. Now it gets hard – I need to reduce it another 50% for our final portfolio to be traded on June 1st. I am very happy with the growth of the companies in our universe. It’s gratifying to see that more and more companies are taking sustainability seriously and are integrating the concepts into their products, services and corporate ecosystems.
The entire team thanks you for your business, friendship and introductions. I’m excited to report that we continue to add new clients and assets through this difficult time. It tells me we’re doing the right thing for our current clients, putting your interests first, investing responsibly and staying in constant communication.
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Until next time, stay safe and healthy!
My Best,
Peter Krull
CEO & Director of Investments
Earth Equity Advisors, LLC
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