Your First Quarter Newsletter

QUARTERLY NEWSLETTER | APRIL 2021 | ISSUE 5

A Letter From the President

As we emerge from winter with signs of a reopening and recovery from the pandemic, we look to the future with optimism. Spring signals rebirth and to that end, our team has been hard at work refreshing our brand and website to reflect a deeper focus on you — our clients. Click here to see the new website.

We hope you enjoy our new look and feel. The entire Penobscot team looks forward to the day we can meet in person again.

Have a safe and healthy spring.— Dan Ford

First Quarter 2021 -

Quality Will Out

One year ago, in March of 2020, investors experienced the sharpest decline in the stock market averages since the mid-1980’s. Covid 19 and the economic havoc wreaked by the pandemic were the culprits, taking the Dow Jones Industrial Average from 29,219 on February 20 to 20,188 on March 16, a decline of 31% in three weeks. This was the “Black Swan” event presciently predicted by Colleen MacPherson, Penobscot’s Director of Research, in her year-end letter of 2019. What was unpredictable in the immediate aftermath of the great decline was how quickly the markets would rebound to recover the markets’ losses by mid-November in spite of continued dire economic news, layoffs, business closures and election turmoil. As of this writing, the DJIA closed at an all-time high of 33,171 (as of 3/29/21).

How do we rationalize such volatility over so a short time frame? Various market pundits have had their say in the matter. The consensus seems to lie in the belief that before the virus became the widespread pandemic of today, the economy was poised for another year of strong growth, aided by accommodating Federal Reserve interest rate policies.

As the pandemic gained strength surprisingly quick congressional action to pass an enormous emergency stimulus package staunched the hemorrhaging of job losses and put much-needed spending power in

When asked why his company was so successful

Walt Disney coined the phrase “Quality Will Out." We believe that over time, quality will outperform.

the economy. “Confidence” in the pre-pandemic bullish forecasts was restored, and the equity markets have continued their climb to current record levels.

At Penobscot, experience tells us that one year, let alone three weeks, does not make long-term portfolio returns. In our view, what truly rationalizes investment returns is the ownership of high-quality, well-managed companies, in good businesses with predictably growing earnings over multiple-year time frames. These companies have the greatest likelihood of regaining their value after temporarily being reduced in declines such as that of March 2020. When asked why his company was so successful Walt Disney coined the phrase “Quality Will Out." We would add that over time quality will also outperform.

Analysts are now coalescing around the concern that the depressed markets of one year ago are now approaching an overvalued “bubble.” Time will tell but we are confident that “Quality Will Out” once again.

As always, we are grateful for your trust in us and welcome your questions and comments.

Welcome Jarret Dewberry

Client Services and

Operations Administrator

Penobscot is proud to introduce our newest team member, Jarret Dewberry. Jarret joins us as a Client Services and Operations Administrator.

Most recently, he served as a Client Associate at Merrill Lynch and prior to that, as Operations Administrator at Brown Brothers Harriman. He holds a Bachelor of Science (BS) in Finance and Financial Management Services from Bay State College.

We asked Jarret to share a few details about his work and life with our readers.

What attracted you to Penobscot?

Having the ability to work for a company that wants to help its clients reach new heights. Also, not being looked as an employee but a partner with fresh ideas that can help the company and its clients succeed.

What is your primary role?

My primary role is to be the first point of contact for the client in any capacity whether it’s opening accounts, trading, maintenance, or assisting with problem solving.

What are your outside interests?

I love to play and watch basketball and I also enjoy spending time with my three daughters and large extended family. As a family, we have participated as a group (pre-Covid) in charitable fundraisers, such as the Walk for Autism and the Walk for Breast Cancer.

What is your greatest asset?

My greatest asset is I’m a people person. I love to listen and learn about a person's background. You can learn a lot about a person through their stories, which helps to build stronger relationships and bonds.

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