PERFIDY
By Richard L. Kesner, President
The CommonWealth Group
February 2009
“Authority knows how to take decency out of play. There is no devilish deed that cannot be shined up into a patriotic necessity by the right propaganda. All that is needed is for people to believe in their duly elected leaders.”
“This they have always done. The talent for believing in authority is the backbone of every civilization. Even though our present civilization consists of nations
red-faced with hate and threatening fiercely to destroy each other and the planet to boot, this belief does not waver.”
“Should the planet go up in smoke on some tomorrow, such a finale will not lessen the status of authority.
I feel sure that the last hundred million earthlings to expire in the hydrogen blasts will do so with unshaken faith in the correctness of their leaders.”
Ben Hecht, “Perfidy”
1961
I came across the preceding statements while reading the book “Perfidy” and thought it was about today’s world situation. And it is. It is amazing how the world has not changed since this was written in 1961.
2008 will go down as a historic year for both good reasons and bad reasons. The election of the first African American President is a positive for us and for the world to see how a free market system of government operates. The transfer of power from one presidency to another is truly a remarkable event. We hope that President Obama and his advisors have “the right stuff” to make America what it once was
and to rescue the economy from the current economic
recession.
On the negative front, the mortgage meltdown, Fannie Mae and Freddie Mac debacles, wire house and bank failures, etc., will cause many to reflect on 2008 as the worst year ever. And, from an economic and investment standpoint, 2008 will certainly rank as one of the worst years ever. For all of us, this is a time of reflection as well as a time to reevaluate our financial situation.
We have been in touch with most of you throughout the crisis and will continue to monitor each of your accounts in
an effort to meet your long term goals, risk levels and objectives going forward. We are cautiously optimistic about the markets for 2009 and feel that over time the markets will gain traction and return to their normal profitable ways. Time has always been the friend of investors. That is why we stress long term goals and plans for everyone.
As you know, we run three hedge funds of funds out of our offices. Two of these funds, Ibex Absolute Return Fund and Ibex Income Fund have had a decent year. Ibex Absolute was down 11.9% for the year and Ibex Income was down 3.2% for the year. The Ibex Growth Fund was down 30% for the year which beat the index by 700 basis points.
Each of these funds has a strict discipline as to how much we can invest in any one manager and any one discipline. Bernie Madoff and the other Ponzi schemes discovered have no investments with Ibex because they could not pass our due diligence and the due diligence of our sub advisor.
Asset allocation has always been and always will be the most important part of achieving your goals and objectives. We stress this with all of our clients and we stress this in all of the Ibex Funds. Asset allocation has historically made up about 92% of the investment return in portfolios and we believe that the statistic will be more important going forward.
We all appreciate the trust and confidence you have placed in us to handle your investments. Please feel free to call us with any questions you may have.
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