So, as always, I will break my year-end letter into two parts: first, the timeless and enduring principles reinforced by these two years, and then a consideration of current conditions.

General Principles

• The economy cannot be consistently forecast, nor the market consistently timed. Thus we believe that the highest probability method of capturing equities' long-term return is simply to remain invested all the time.

• We are long-term owners of businesses as opposed to speculators on the near-term trend of stock prices.

• Declines in the mainstream equity market, though frequent and sometimes quite significant, have always been surmounted as the word’s most consistently successful companies ceaselessly innovate.

• Long-term investment success most reliably depends on making a plan and acting continuously on that plan.

• An investment policy based on anticipating (or reacting to) current economic, financial or political events/trends most often fails in the long run.

Current Commentary

• I remain convinced that the long-term disruptions and distortions resulting from the COVID pandemic are still working themselves out in the economy, the markets and society itself, in ways that cannot be predicted, much less rendered into coherent investment policy.

• The primary financial event in response to COVID was an explosion in the money supply by central banks around the world. It predictably ignited a firestorm of inflation.

• To stamp out that inflation, these same central banks implemented the sharpest, fastest interest rate spike in history. Both debt and equity markets cratered in response.

• Despite this, economic activity just about everywhere has remained relatively robust; employment activity has been largely unaffected, at least so far.

• Inflation has come down significantly. But prices for most goods and nearly all services remain elevated, straining middle-class budgets.

• Capital markets around the world have recovered significantly as speculation now centers on when and how much lower interest rates may come to pass in 2024.

• Significant uncertainties abound. Trends in both the Canadian and U.S deficits and national debts continue to appear unsustainable. In the U.S., unless reformed, Social Security and Medicare appear to be on paths leading to eventual insolvency. And, as we all know, a bitterly partisan U.S. presidential election looms later this year. The markets will face significant challenges in the year just beginning—as indeed they do every year.

My overall recommendations to you are essentially what they were two years ago at this time, and what they've always been. Let's revisit your most important long-term financial goals soon. If we find that those goals haven't changed, I'll recommend staying with our current plan. And if our plan isn't changing, there most probably will be no reason to alter your portfolio materially.

As always, I welcome your questions and comments, I look forward to talking with you soon, and thank you again for the opportunity to work with you. It's a privilege for me to do so.