by Chad Meyer, CFA

By the age of twenty-five, some people have already changed or influenced our world. Charles Lindbergh, age 25, completed the world’s first solo transatlantic flight, pushing modern aviation forward in one 3,600-mile swoop. At age 24, Orson Welles wrote the script for Citizen Kane, widely considered a crown jewel of twentieth century cinema. During the Hundred Years’ War, Joan of Arc led the beleaguered French army to a momentous victory over the English at Orléans. She was just 16 years old. Alexander Hamilton, dead set on making a name for himself in our young republic, led a battalion to victory over the British at Yorktown. He was only 25 years old, when five days later the British surrendered.

Tufton Capital, now entering its twenty-fifth year, has yet to direct a film or birth a nation. Instead, we’ve tended to a much humbler field – the financial well-being of our clients. In 1995, this firm set out with the notion that a value-driven investment approach, applied by a disciplined team of professionals, could create meaningful long-term returns. This idea may not change the world, but as we place our first quarter of a century in the rearview, it is our sincerest hope that this team’s efforts have at the very least changed your world. Your trust is the foundation of this enterprise, and it is our privilege to guide you along the way.

Now, with that bit of sentiment out of the way – to the stock market! In sharp contrast to 2018, last year ended on a high note, with the S&P 500, Dow Jones and Nasdaq notching fourth-quarter gains of 9%, 7% and 12%, respectively. From a sector perspective, Financials and Health Care (the fate of which appears inversely correlated to “Medicare for All”) turned in strong performances. But as with 2019 generally, Technology was the main event, with mega-cap players like Apple and Microsoft pulling along their peers.

Its healthy conclusion notwithstanding, some investors may recall the last quarter of 2019 by its turbulent middle chapter. Following October reports that a resolution to the U.S.-China trade dispute was in the offing, November came and went with precious little in the way of deal details, stoking investor anxiety and prompting market fluctuations. Indeed, by early December – with President Trump’s $160 billion tariff deadline fast approaching – one could have been forgiven for wondering if “phase one” of the agreement was still stuck at zero. The mid-month news that the deal was, in fact, moving forward occasioned a collective sigh of relief, but the feeling that it was not a fait accompli left a lasting impression.

What exactly might the “next steps” look like? On that score, your guess is as good as mine, and I will once more spare myself the embarrassment of issuing a year-to-come “outlook.” (In terms of election results, I trust you had enough politics at your family holiday gatherings). Peering out into our year ahead, I’ll instead simply emphasize the “all-weather” elegance of our approach to guarding and growing your capital. As value investors, we restrain ourselves from deploying capital based off breaking news, market forecasts or Wall Street hype. Instead, we remain committed to – as these two and a half decades have only affirmed – the proposition that the only prudent way to pursue your interests is by buying excellent businesses, at attractive prices, without undue reference to or reliance on the broader market’s short-term orientation. It’s a job that we love to do, and in that regard, one that any twenty-five-year-old would be deeply fortunate to have. From all of us at Tufton Capital, here’s to good tidings for you and yours, and to our continued growth in 2020 and for many years to come.