This is a very difficult annual message to write. It is hard enough to sum a year up in a single page, and, much more challenging as 2008 finished with a series of events so disappointing and so historically significant that we can all expect life altering changes over the next several years. We are all trying to find the silver lining in the economic change that is our new reality, but this fundamental shift has many more implications than we have yet been able to appreciate. Our personal perception is very much affected by the erosion of our confidence in the economy and now damaged institutions we see all around us; it is erosion that has abraded the peaks from a lot of our business and personal plans.
Timing makes the change come close to home very acutely for our family as we endeavor to re-set expectations around major personal decisions facing each one of us. Our kids are making their way in college; they face the disconcerting challenge of finding careers in a different and more unpredictable economy than we or they have grown up with. We, the parents, were contemplating the approaching retirement red zone; now expectations must be adjusted to the realities of wealth destruction that affects every one of us.
The behaviors and attitudes we are adopting, including frugality and the recognition that we have to give close attention to limits, drive different choices today than we would have made even 6 months ago. Perhaps they are smarter choices, though in retrospect the choices we did make were not imprudent, and there is a small solace in knowing that different decisions about spending or saving would probably not have found us any significantly safer harbor. On the brighter side, perhaps now our life choices will be made more on the basis of personal preferences, and less distorted by the unreal economy that has seduced all of us these past several years.
Our Personal Precis
The year began on a strong positive note, as Nellie, Kevin, and Frances, with our good friend Jerilyn Walter, went to Spain to tour and to deposit Frances for a semester in Barcelona. Frances is majoring in Spanish at the College of Charleston, graduating in May to the newly more uncertain world of full time employment. She has interest in traveling to gain more exposure to global opportunities, and we are eager to see what plans she makes. She has the lust for travel and exposure to different cultures and ways of thinking that we hope to continue to learn from.
Gus is in the middle of sophomore year at Harvard, and seemingly heading toward a major in English Lit. He continues to be very active on campus performing and participating in various social and service organizations. Some of his a cappella performances will be linked to this note on the sidebar. He also performed in Henry V and Titus Andronicus. He plans to spend less time performing over the next few months, and focus on his writing – a skill and talent we are thrilled he will be exploring further. Next summer he, like Frances, plans to travel, though plans are fluid.
Nellie has been multi-careering, especially as we have focused on managing through some of our real estate entanglements in the last few months. She has also become increasingly active with her healthcare clients as they examine their strategies to adjust to government limits and shifting consumer expectations. Her third full time role has been overseeing RJ Miller, our salon and day spa on Nantucket. In spite of a challenging economy, demand for personal services has remained strong, though 2009 has us all guessing. And withal, her golf scores are now down to the mid-90s.
The efforts of HES Advisors, Kevin’s team of consultants, has seen a shift as we focused in the first part of the year on advising acquiring companies in the healthcare information space, and the second half of the year on working with smaller clients on how to improve performance so as to sustain in an era of tighter limits, and likely of much more government intervention. Merger/acquisition activity has slowed down considerably, and access to capital for small companies that want to grow is just plain brutal.
One government intervention Kevin has stayed very close to is the recovery of WellCare Health Plans from the October 2007 FBI raids. Kevin was elected lead independent director to help ensure the board exercised appropriate diligence in its efforts; the board had 28 meetings in 2008, which likely ranks it up there with GM (not a good neighborhood). Progress on the recovery path is slower than hoped for but directionally strong.
Nellie and Kevin made the trek down the East Coast for our semi-annual migration from Nantucket to South Florida with the dogs. Our sun-bird travel ritual is also a time to reflect on how much those beasts have come to command us with their own demands for caring and oversight, plus grooming, dental care, dieting, etc.; all going up in cost faster than human health care has. But we owe them, because we made them love us and they (usually) obey us.
Resolutions We Have Chosen
- We need badly, for the good of our psyches, to get over our nagging concerns: the limits ahead that the next generation is inheriting; the vast expansion of the federal government’s efforts to steer the economy and to redistribute wealth; the meltdown of good businesses that find themselves in the wrong place at the wrong time.
- We will work on focusing closer to the modest virtues of family, hearth and home: more cooking, gardening, yoga, golf.
- We will practice moderation in all things, including moderation.
- We will work on building up spiritual reserves and personal deleveraging.
- We have been affected but we are not victims; we will not be angry or cranky about the way things have changed.
- We will seek to rebuild our personal balance sheets with assets that have more resilience, those that will sustain us as we confront ongoing uncertainty.
....And may you and your family find the true wealth that lies in the hidden assets we all have.
