With the fireworks long faded, and the bunting stowed away, the high holiday of summer has come and gone. But if the party is over, a question now looms large. Who’s going to tell that to the American stock market?

For all the talk of stormy seas that preceded it, the story of 2017 has turned out to be one of decidedly smooth sailing. In the first six months of the year, both the Dow Jones Industrial Average and the S&P 500 rose by 9%, more than doubling their gains over the same period last year. Over on the NASDAQ, where high-technology (and high-publicity) business models reign supreme, the good fortune rolled in even faster. Up 15% since the year began, the index is on track to turn in its best year in nearly a decade. A few weeks back, while all three indices breached or skirted all-time highs, the VIX—which measures fear in the market—approached a 20- year low. Just like those 4th of July fireworks, the year has certainly begun with a “bang.”

In frothy times like these, you may notice that the notion of all investments being good investments tends to gain traction. As the saying goes: “A rising tide lifts all boats.” And yet, digging into the data, we find that the case for careful asset selection—as opposed to “spraying and praying”—remains more compelling than ever. This is evident in a survey of the season’s IPO schedule, in which hotly-anticipated offerings such as Snapchat and Blue Apron proved better at selling newspapers than rewarding shareholders.

Perhaps more important, this is evident in the market’s success stories. Consider, for instance, the aforementioned S&P 500. Of the 500 stocks tracked in the flagship index, a mere twenty-five accounted for nearly two-thirds of this past quarter’s gains—or, put simply, a minority of stocks created the majority of returns. To your dedicated team of investment professionals, this phenomenon is a stark reminder that even when “all boats” are rising, some certainly rise higher than others. This is why, even as we happily report that many of those top twenty-five companies are Tufton holdings, we remain hard at work on your behalf, in diligent search of the horses that will pull next quarter’s cart.

In the pages ahead, you’ll find an overview of one company that we believe fits that bill, along with some of our most current market insights. In an effort to more deeply articulate the thinking behind those insights, we’ve also included a brief “spotlight” piece on Benjamin Graham, a pioneer of value investing and role model to more than a few members of your investment team. It’s our hope that you’ll read them at your leisure, and give us a call should anything catch your eye. Because no matter where the summer takes you—and we do hope it’s somewhere relaxing—you can rest assured that we’ll be here, carefully guarding the trust you’ve placed in us.

Chad Meyer, CFA

President