A Letter to Clients and Friends

Thank you for your continued confidence and trust in me as your financial advisor.  I have chosen the Registered Investment Advisory platform because the acceptance of the full fiduciary standard frees the client/advisor relationship from the constraints and agenda of a large financial organization.  Client assets, however, will continue to be custodialized and accounted for by Fidelity Investments.  Bay Colony Advisors is responsible for compliance monitoring and James Catachio, EVP of that firm, will act as an emergency contact (978-369-7200, Ext. 2)

Please let me officially introduce our firm, Asymmetric Capital Advisory.  The name was chosen because it describes the current political economy, and therefore implies our method for managing money.  Shifting global relationships and business models disrupted by technology present asymmetric risks and opportunities.  American struggles to redefine our relationship with China and the concurrent effects of that disruption on European relations suggest heightened volatility for the global economy.  However, the networking effects of technology may mean that we are at the dawn of a period of dynamic productivity growth akin to the 1990’s or even the 1920’s (another period of an inverted yield curve).  This is an environment in which it will be important to balance our attention to risk/reward and not focus so intently on the negative headlines that we ignore other secular opportunities.

Successful investing is always about regulating investor behavior. An advisor should provide clients with the tools necessary to do so.  One of those tools is education; we are currently developing a website which will provide clients with thoughts on individual securities, book reviews which inform our opinions on various trends, and maybe a laugh or two.

We believe that the knowledge and understanding gained from owning individual securities can significantly improve client’s ability to regulate behavior.  Most market corrections, or drawdowns, are temporary; individual stocks allow the mind to defray the negative emotions of that drawdown with the rationale of the intrinsic qualities of each position.

We view our Dividend Growth and Aggressive Growth models through the lens of five current investment themes (and sub-themes).  These are generally the basis for security selection in each of the two model portfolio models.

The first is 5G, the next generation of cellular connectivity, its build out (AVGO, ASML, CIEN, XLNX, CSCO), influence on industrial productivity (ABB, PTC, ROK, SSYS), and finally the industrials which themselves benefit from digitization (HON, PH, GM, CAT).  The second theme is the digitization of our world through the cloud (MSFT, AMZN, ADBE, INTC).  The third theme is healthcare, focused on medical devices and diagnostics (MDT, ILMN, NVTA) and personalized medicine and genomics (NVS, CRSP, RGNX).  The fourth is financials.  Bank of America (BAC) is the most digitally advanced traditional bank.  Blackstone (BX) should benefit from the robust IPO market that is the result of these trends.  Fidelity  Information (FIS) and PayPal (PYPL) are consolidating and disrupting the payments space.  The fifth theme is simply, “Other Disrupters”.  These are older companies with substantial resources to compete with the earlier, successful, disrupters of their industry.  Walmart (WMT) is giving Amazon (AMZN) its first real competition and Disney (DIS) is taking on Netflix (NFLX).

I would welcome the opportunity to discuss any of the thoughts or questions you might have regarding these topics in more detail with you.  We have had a successful first quarter and I am looking forward to a profitable 2019.

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