Dec 7, 2021
To our clients:
The past few weeks have been particularly volatile across the market, and we know that many investors—including our clients—are feeling the heat.
I’m personally invested in Titan’s strategies, too. So I mean it when I say: I get it. I know it’s been a tough month.
But well before this most recent period of volatility took hold, we’d begun preparing our portfolios for a more challenging period ahead.
And historically, difficult and volatile periods tend to be the most fertile and productive for our long-term, research-driven investment approach.
In recent weeks, we added to positions in the healthcare and industrial sectors, and dramatically reduced our exposure to high-growth software names.
We’ve also added substantial cash holdings to each of Titan’s three equity strategies. We believe that in the near future, we may be able to deploy this “dry powder” into what we consider to be high-quality businesses, trading at deep discounts.
These moves have also enabled us to harvest losses for many of our clients, potentially offsetting capital gains elsewhere in portfolios and reducing expected tax burdens in the year ahead.
We’re also prepared to activate market hedges if conditions get worse, subject to some of the technical indicators we’re evaluating.
The Omicron variant has shaken some investors, as has the Fed’s increasingly stringent language on inflation. Negative headlines out of China, recent IPO disappointments, SPAC implosions, and wild crypto swings have all led to a frenetic energy in the markets.
Strong quarterly results have been immediately discounted by many investors, and many names across our portfolios are trading at their cheapest valuations in years.
During periods of turmoil, we believe the biggest advantage our clients can give themselves is time.
Long-term investors have a serious edge in markets like today’s, and steady deposits may result in bargain buys through the cycle’s ups and downs.
We could make comparisons to other volatile periods for investors—periods which resulted in substantial gains for Titan clients—but ultimately, comparisons don’t ease the burn. This market is a very challenging one. We hear you.
As always, we’re honored to be able to manage your capital. In the weeks ahead, I’ll be sharing more of our gameplan for 2022—and you can always reach our team directly via the Titan app.
Thank you, Clay Gardner Titan Co-CEO and Chief Investment Officer
P.S. I know you may have questions about this volatile moment, and I'd love to answer them. I'll be answering client questions through the Titan app every week. Send yours to askclay@titan.com.
Cash Management
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