Having apparently exceeded the karmic speed limit earlier in the year, the S & P 500 slowed its pace this quarter, posting a (mere) 1.7% gain. Marshfield’s portfolio, which includes a sizeable cash position, once again held its own.
For all its apparent ebullience in 2019, the market has not been a particularly happy place of late. Beset by worries about trade, politics, interest rates, and the policies of candidate [fill in the blank], it spent the quarter mostly in listlessness, punctuated by brief moments of euphoria. It was as if it were channeling the recent New York Times article that posed the existential question: Are We Living in a Post-Happiness World? If happiness, according to this article, is “a positive state of overall well-being combined with a sense that one’s life has meaning,” then the market is decidedly not in the happy camp (and arguably never has been). Discrete moments of joy, on the other hand, are apparently more achievable, and enough moments of joy strung together can approximate contentment. As its continued upward trajectory suggests, the market was able to string enough moments of joy together to make for a positive quarter despite its anxiety about the chaos and uncertainty in the world.
We at Marshfield have no illusions about happiness but we do try to harness joy—albeit in a different way than the market. You could call it the Kondo approach, after Marie Kondo, the Japanese decluttering guru. As patient investors, we await those moments that “spark joy”: we buy only when we find a company we like at a price that affords us substantial protection against the permanent loss of our investment dollars and we sell only when we believe the price at which a stock is trading is unsustainable or the company no longer merits our continued embrace of it. These moments of joy are infrequent—especially, lately, on the buy side. But we stand ready for that spark to flash green at any time. In the interim, as we continue to look for new opportunities and review our existing holdings, we try to find at least a modicum of contentment (and a bit of Zen) in practicing patience.