Rivalry Week

This is an exciting time of the year for me. The oppressive summer heat is finally dissipating, gradually replaced by refreshing breezes of cooler autumn nights and the eventual canopy of brilliant fall colors. Then comes the most exciting sports season of them all – college football. The culmination of which is not the bowl games, or the season-ending playoff, but the last game of the regular season, well publicized as “Rivalry Week” when anything can happen. This annual game-for-the-ages weekend is highlighted by: Alabama v Auburn, Notre Dame v USC, and the biggest game of all, Ohio State v Michigan. It also includes rivalries around the country, some going back to the previous century. Players in these games remember the outcome for the rest of their lives. Winning these rivalry games matters a lot, but competing with honor matters more.

The concept of competing with honor is always on my mind, I am inspired when I witness it, and am disgusted by any competition without it. Last weekend, Tiger Woods, with whom I’ve never really been a big fan, shot an amazing final round 64 in the PGA Championship, despite struggling mightily with his swing. His score was amazing, and his grit, determination, and will to win, demonstrated his strength of character. In essence, he competed with honor.

Competing with honor should be a code of conduct for everyone, in every profession, vocation, and relationship. How often do we witness it? Is it common place or rare? I have to admit, these thoughts about honor gnaw at me, especially when I read the news and think about the challenges facing our country. In many respects, our country appears to be stuck in a rivalry week frame of mind across multiple areas, but too often we seem to be missing the concept of competing with honor. For example, proponents of free-market capitalism are in a never-ending battle against those calling for more government regulation and control. Mutual distrust between these opposing forces has all sorts of negative ramifications. For instance, the goal for each side is not to find common ground or compromise for the greater good, the goal is to defeat the opponent at all costs. From a business perspective, a lack of trust in government and the threat of more regulation, promotes decision making that is overly risk-adverse and insular. Not surprisingly, some politicians view this behavior as selfish and greedy, thereby warranting more regulation. None of this is good for the economy, consumers, or the markets.

Meanwhile, Main Street America is in a perpetual battle against political elites and big-money influencers. Again, the goal for these combatants is not to work toward compromise, it is to bury the enemy. This attitude isn’t healthy or productive in the long run, yet we can’t seem to break this vicious cycle. In my view, this begs the following questions – Are the people responsible for driving these competitions competing with honor? If not, how would it look different if they did?

Until we address these questions, we are going to remain polarized as a nation. We can’t be the beacon of the free world if we remain divided. In my view, that is a role we must play, it is a responsibility we must embrace. But without honor, the rest of the world won’t follow us, they won’t respect us, and they shouldn’t.

The foundation for competing with honor is personal integrity. We must demand it in our leaders in all walks of life, and each one of us must demonstrate it in all we do. It’s as basic and simple a concept as there could possibly be, but it is very difficult to implement or produce consistently. Currently, we fall far short of demanding integrity in our leaders and in ourselves. What can motivate us to change this, to embrace this simple concept and build a foundation of integrity that is so important to our future as a nation? At times I am hopeful, at other times I am discouraged. It is, I think, the defining issue of our times.

My sense is there is a growing probability that the strong economic growth achieved in the second quarter of the year will be unsustainable. Tariffs are going to start to impact earnings and the chances that escalating trade disagreements may intensify the hit to earnings is not small. It is time to be a bit cautious and we have done so within our equity portfolios. Meanwhile, we are approaching an important interim election, which could also increase market volatility. As always, we will be disciplined and patient as we search for attractive investment opportunities across our portfolios. It is a commitment to our clients and we embrace it. Perhaps, that is a start…


Michael Kayes, CFA