First Quarter 2020: One for the Record Books

Published by Waycross Partners on

First Quarter 2020: One for the Record Books

Letter From Ben

Dear Fellow Investors,

The first quarter of 2020 was one for the record books. US stocks dropped precipitously in the first three months of the year as concerns about the global coronavirus pandemic and its impact on businesses and the economy grew. Amid a tumultuous quarter that included a record high, the fastest correction in history, and the best week of gains since the 1930s, the S&P 500 (down 20%) ultimately logged its worst quarter since 2008.

It was also a very unusual quarter for both the oil and government bond markets. Oil prices had their biggest one-day drop since the Gulf War, plunging 25% on March 9, triggered by a price war between Saudi Arabia and Russia. The level and shape of the US yield curve were buffeted by a collapsing global growth outlook, extraordinary policy moves, and a flight to safety.

Investors again sought the perceived safety of defensive stocks, with Consumer Staples and Health Care among the top performing sectors in the S&P 500. Unsurprisingly, the Energy sector posted the largest decline for the quarter, the result of the decline in crude oil prices and Saudi Arabia declaring its intent to hike its oil output in April, further applying downward pressure to prices on the supply side while the coronavirus simultaneously dragged down energy demand. Some pre-coronavirus crash trends persisted during the quarter: Less volatile large cap stocks outperformed small caps and growth outperformed value.

We expect volatility to continue as uncertainty remains. Investors seek answers, yet so many unknowns remain. What we do know is that we will get through this period of uncertainty in the market. Things will eventually get better. This too shall pass. We maintain a long-term view and remain committed to our Key Factor approach, which keeps us focused on only the most critical drivers to a company’s earnings to emphasize companies that are either leaders in their respective industries or are disrupting their industries through innovation on the long side, and seek to short stocks with weak Key Factors at questionable valuations.  We believe this disciplined, focused process allows us to minimize distraction from the market noise that occurs when volatility is heightened.

We appreciate your continued partnership with us. Please stay healthy and safe.


Benjamin H. Thomas

Waycross News

In March, we added a new member to the Waycross Partners team.

Please help us welcome Shannon Burnett, Client Relationship Manager, to the firm. She brings more than 20 years of experience to the role, having held various marketing and client relations positions at River Road Asset Management, Integrity Asset Management and INVESCO Institutional. Shannon holds a degree in Psychology from the University of Louisville and an MBA from Bellarmine University.

Please contact Shannon at (502) 410-1915 or with any account-related needs you may have.

Click here to meet Shannon.

Waycross Partners, LLC (“Waycross”) is an independent, privately owned investment management firm registered with its principle place of business in Louisville, Kentucky. Waycross offers investment strategies to our clients, which are made up of institutional and high net worth individuals. This material is for informational purposes only and is neither an offer nor solicitation to invest. Please read all offering memorandum, ADVs, and other risk disclosures before investing. Any projections, market outlooks or estimates in this document are forward looking statements and are based upon certain assumptions. Other events which were not taken into account may occur and may significantly affect the returns or performance . Any projections, outlooks or assumptions should not be construed to be indicative of the actual events which will occur. The enclosed material is confidential and not to be reproduced or redistributed in whole or in part without the prior written consent of Waycross Partners. The information in this material is only current as of the date indicated, and may be superseded by subsequent market events or for other reasons. Statements concerning financial market trends are based on current market conditions, which will fluctuate. Any statements of opinion constitute only Waycross Partners’ current opinions, which are subject to change and which Waycross Partners does not undertake to update.

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