Four times a year I write letters to IMA clients. In these letters I diligently walk clients through our research on stocks we own, including those we have recently bought and sold. I cover how we value them, why we own them, etc. I update clients on our thoughts on the economy and the market. I call these musings “seasonal,” not quarterly, letters. There is a good reason for that. Quarters follow a discrete calendar, while my writing muse has a mind of her own and keeps her own schedule. Also, I like to wait until our companies report their quarterly results before I write about their progress. I usually wait a month after the quarter ends before I start working on the letter. These letters are very in-depth and lengthy – some run as long as 30 pages.

It takes me two to three weeks, two hours a day, to write a seasonal letter.

Why do I write them?

I spoke to my friends in the investment industry who write letters to clients, and they told me that their clients rarely read their letters. Though there is no reading or speed-reading exam to become an IMA client, and these letters are not followed up by a written exam, I have found that the majority of IMA clients do read these letters. Just as companies get the shareholders they deserve, investment firms attract clients who are like-minded. IMA clients tend to be readers, and they have the intellectual curiosity to learn what is happening in their portfolios and why.

For IMA clients, without my letters these companies are just ticker symbols – clients are not even in the passenger cabin; they are down in a dark corner of the cargo bay.

Let me tell you a story. I have a client who is a retired airline pilot. As we sat together in my office, I mentioned to him that I was afraid of flying. I fly a lot (pre-COVID), but every time I am on a plane and it starts shaking and chattering due to turbulence, I become a little bit more religious. I tell myself that these things happen all the time and that most plane crashes happen on the takeoff or landing. There is a turf war inside me between rationality and fear.