Dear Clients, Colleagues, and Friends,

I’d like to thank you for the trust and confidence you’ve shown in Two Point Capital Management. In challenging times like these we’re doubling our efforts to strengthen your confidence by staying focused on what we do best: controlling risk and investing your savings effectively in a changing world.

One of the reasons you chose us is that you value the long-term approach to investing. We know this health crisis will peak and pass and that it won’t fundamentally change the way the economy is structured. In fact, the financial market reaction to this crisis has much in common with other downturns I’ve navigated successfully over a 30-year-plus career, including the crash of 1987, the Internet bubble burst of 2000, the global financial meltdown of 2008 and any number of slowdowns and recessions in between.

One thing I’ve learned over the years is the importance of consistently executing our investment discipline when near-term events are most stressful. It’s at times like this that the market provides an increased number of better-than-usual investment opportunities. As a result, you should expect to see a higher level of investment activity in your portfolio in the coming days and weeks.

When times are good I occasionally feel like a wet blanket when I talk about the importance of risk control and having a deep understanding of the companies we own. But the past few weeks are a good example of why these are so important. When we focus first on quality, we look for companies with sustainable advantages that help them weather the unpredictable storms during the long period we plan to own them. Today, in the midst of one of those storms, we’re confident that the companies we own will survive to thrive long into the future.

In addition to quality we importantly focus on value. This helps us reduce risk and increase upside opportunity for each of our investments. During turbulent times, this allows us to identify and take advantage of the lower prices and better long-term investment bargains that will enhance future profits from our investments.

We’ve been heartened over the past couple of weeks by the confidence that our clients have shown. Some have deposited additional cash for us to invest. We’re not rushing in to invest these extra funds but we’ll incorporate them in our investment decisions.

As of yesterday, in the spirit of acting responsibly toward our clients, neighbors and community, Two Point Capital has temporarily migrated to a work-from-home environment, where we have 100% capability to function as we always do. As this situation continues to develop we’ll also be communicating more of our thoughts on investing, the economy and the financial markets. Please remember that you can reach out whenever you have questions or issues that you’d like us to address.

Our wish for each of you is that you and your loved ones remain safe and healthy, and that you can personally find a place of calm within the chaos.

With our best wishes, and at your service,

Jack McGowan, CFA
Founder and CEO

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