What’s an intelligent investor to do now? Buy downtrodden cheap stocks? Or chase high-flying growth stocks at rich prices? Or maybe just sit in cash hoping the market crashes (and hoping you’ll have the courage to buy stocks as they’re plummeting … before the Fed re-inflates them). Or maybe there’s a better strategy? To help us think through these questions, Fielder Capital is pleased to host a fireside chat with Yen Liow, founder and portfolio manager of Aravt Global, a New York based hedge fund. Yen is one of the most talented investors that Steve Korn and I know in the business. He has made a science of searching for “compounders” – durable growth businesses in strong market structures led by exceptional leaders. We’re honored to host Yen for a webcast to discuss what he’s learned over the years - why he focuses on buying and holding compounders and how he identifies them. Date: Tuesday, May 25th Time: 11am Eastern We believe that Yen’s approach to investing in compounders is especially apropos for today’s environment. Here’s why … What if Everything is OK? What if everything turns out OK? Or even terrific? Not because of the Fed or Washington’s policies, but in spite of them? Today I catch myself asking that question a lot. Because everyone I know is so negative today (from one thing or another). As a budding, young stockbroker in the 1990s, I remember how pervasively negative the politics, the media, and as a result, my clients were. Not that there weren’t legitimate reasons to worry. There were. These magazine covers perfectly reflect the angst of the early 1990s . . . (Time Magazine from the early 1990's) But in the end, all of this negative news wasn’t enough to matter. The decade that followed brought the greatest boom in innovation of my lifetime. And markets followed. Between January 1992 and January 2002, the S&P 500 more than tripled (reinvesting dividends). And note that that period includes the internet bubble “pop” in 2000. Today there is plenty that keeps me up at night. At the same time, I am awed by the serious brain-power and serious money dedicated to life sciences, new energy, blockchain, and new materials. And that’s just the sexy stuff that gets all the press. Technology is also enabling business model innovation in more mundane corners of commerce. Uber and Airbnb are great examples there. It may well be that the best investment opportunities are found among these less glamorous (and less obvious) places. Maybe – just maybe – we are on the cusp of another great leap forward? What if innovation and economic growth surprises to the upside? What if this progress is so exponential that even the meddling mandarins in Washington, Brussels and Beijing cannot do enough damage to stop it? Maybe everything turns out pretty darn great. If that’s the case, count me in. I want to own a piece of it. We need to be on guard against the dangerous muscle memory that bad periods induce. It was really hard to have a bullish outlook after the Great Malaise of the 1970s … or after the internet bubble popped … or after the financial crisis. But those periods ended up greatly enriching a minority of optimists. We should thus remain vigilant against the cataracts of 2020 impeding our ability to see the green shoots of prosperity. What if Everything Is Not OK? Sometimes pessimists are right. What if things don’t go well? What if Washington really does ruin the party? If economic stagnation is our future (or worse, stagflation), maybe our best defense is a strong offense. Sun Tzu in The Art of War counsels that “Attack is the secret of defense.” How do we best translate that to investing? We at Fielder believe it means owning a select group of great businesses run by truly great people (acquired at sober prices). In a stagflation scenario, that may be our best hope to outgrow the malaise. How can we do this as intelligent investors and not foolish speculators? For that answer, we are fortunate to be able to turn to Yen Liow. Aravt, the named of Yen’s firm, refers to the elite soldiers of Genghis Khan. They too believed that the best defense was a strong offense. We hope you can join and learn with us from our chat with Yen. Yours in the Field, Frank Byrd, CFA IMPORTANT DISCLAIMERS: This note is for educational purposes only. It is not a recommendation to invest in any particular security or strategy, since anything mentioned herein may be completely unsuitable for some investors. Speak with your financial adviser before investing. Fielder cannot promise any investment result. Every investment strategy has the potential for profit or loss. All investing involves risk including even the complete loss of invested principal. The above information was prepared in good faith by Fielder for general education purposes. Nothing herein constitutes an offer to sell or the solicitation of an offer to purchase any fund or account managed by Aravt Global. Any such offer or solicitation may be made only by means of the delivery of a confidential offering memorandum or other offering materials (the “Offering Documents”), which you can request directly from Aravt Global at (212) 599-8218. While the information presented herein is believed to be accurate, Fielder Capital Group LLC (Fielder) makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in the document. Fielder is under no obligation to notify you of any errors discovered later or of any subsequent changes in opinions. Nothing herein should be construed as a recommendation to buy or sell any of these securities. It should not be assumed that any of the securities, transactions, or holdings discussed will prove to be profitable in the future or that investment recommendations or decisions Fielder makes in the future will be profitable or will equal the investment performance of the securities discussed herein. Fielder or its employees may have an economic interest in securities mentioned herein.

Amen of the Week: “America is not on the decline… Why do I believe in the long-term success of the US?… Every year, thousands of bright and restless immigrants are allowed into America, settle and become successful in various fields. These immigrants are innovative and usually more adventurous, or they would not have left their own countries. They provide a constant source of new ideas and bring about a certain ferment within American society, a buzz that you will not find in China. America would be far less successful without them…. Because the US is able to embrace these immigrants, help them integrate and offer them an equal chance of realizing the American dream, there is a continuous inflow of talent that contributes, in turn, to the creation of new technology, new products and new methods of doing business… That is why I am in favour of sending (Singaporean) students on scholarships to Britain instead, because I am sure they will come back.” - Lee Kuan Yew, Former PM of Singapore (from One Man's View of the World by Lee Kuan Yew, 2013) This week I’m in Singapore. On my ride from the airport, I was surprised to see that this place looks and feels even richer than four years ago on my last visit. The state of a country's public restrooms is, in my mind, the perfect measure for how advanced a society is. On this score, Singapore makes America look decidedly third world. Airport bathrooms have touchscreen monitors that allow you to rate their cleanliness. How’s that for customer service and accountability? Given my recent focus on great founders, I thought it appropriate to dedicate this week’s note to the founder of modern Singapore, former PM Lee Kuan Yew (aka “LKY”). Under LKY’s iron fist leadership, Singapore rose from a tiny third-world country in the 1950’s to become one of the world’s wealthiest, most sophisticated first-world countries. It’s a misnomer to call Singapore “emerging”. It has decidedly emerged. Now is an interesting time to visit the place. LKY passed away earlier this year, and Singapore held the first elections in his absence this past Friday. It was a resounding endorsement for LKY’s party, now led by LKY’s son, who my friends say is even more popular than his father. LKY’s legacy is a study in paradox. Despite his notorious restrictions on freedom of speech (not to mention, the freedom to chew gum), my conversations with cab drivers and friends here elicited only genuine respect, if not adoration, for LKY. Last week’s election certainly reflected this. This support surely perplexes many Western outsiders, though a visit to the country helps open your eyes to the seduction of LKY’s pitch. It’s like Disneyland – complete with a ferris wheel. These are not dumb people being repressed in a Banana Republic. Singapore oozes sophistication and prosperity. But again, there is paradox. My Uber driver explained, “LKY was a great, great man. But he was evil. Those who stood in his way disappeared. But that’s what he had to do to get things done and make Singapore great. Just look around you.” What can we, as investors, learn from Singapore’s smashing success? Four things come to mind: People matter.. A lot. When LKY took power in the 1950s, Singapore was a country with no natural resources and a very poor, uneducated population. One strong leader led it from third-world to first-world within a single generation. Investors often underestimate how much value a leader can create (or destroy). Our biases can blind us. Had I been an investor in the ’60s and ’70s reading of LKY’s autocratic, very un-Western approach, I would have likely doomed him to failure. My political/philosophical hard-wiring would have prevented me from conceiving that Singapore was on course to become the world’s third richest country per capita (America is sixth), with a lower infant mortality rate and longer life expectancy than the US’s. Bad stuff may not be bad enough to matter. Some of LKY’s policies were contrary to what worked for the US, and no doubt, these hampered Singapore's progress. Yet, many of his policies were completely consistent with those that made America successful. For instance, Singapore has low taxes and is ranked among the highest globally on the economic freedom index. Singapore, as with many investments, had negatives that could have distracted us from the positives that ultimately mattered. You have to see it for yourself. Field research matters. The only way to "get" Singapore - or anything - is to go see it for yourself. You'll never truly understand a place/person/company without experiencing it up close with your own eyes and ears. Yours in the Field, Frank Byrd, CFA Disclaimer: While the information presented herein is believed to be accurate, Fielder Capital Group LLC (Fielder) makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in the document. Fielder is under no obligation to notify you of any errors discovered later or of any subsequent changes in opinions. Nothing herein should be construed as a recommendation to buy or sell any of these securities. It should not be assumed that any of the securities, transactions, or holdings discussed will prove to be profitable in the future or that investment recommendations or decisions Fielder makes in the future will be profitable or will equal the investment performance of the securities discussed herein. Fielder or its employees may have an economic interest in securities mentioned herein. This information is intended only for the recipient of this email. Under no circumstances should this report be shared with or forwarded to anyone else without the express permission of Fielder.

"Just because there's tarnish on the copper, doesn't mean there's not a shine beneath." - Laurence Yep (Dragon's Gate) The world is evolving. We must be careful not to extrapolate. Yesterday’s winners are sometimes tomorrow’s losers. (Remember Sears, Kodak, Xerox, and Blockbuster?) Green Picks & Shovels Our leaders from Washington to Paris to Beijing want a lower carbon society. They are now determined to drive policy in that direction. Following President Biden’s inauguration, the US has rejoined the Paris Climate Accord, banned drilling on federal lands, and revoked pipeline permits. Many stocks in the electric vehicle (EVs), solar panel, and windmill space are speculative. Nearly all have nosebleed valuations. Some have little revenue, no earnings, and questionable odds of success. Nevertheless, there is a gold rush mentality driving these stocks. Rather than join these speculators, we prefer to sell them the “picks and shovels” – namely the raw materials they will need to build the infrastructure and vehicles in their quest for a lower carbon economy. Demand Rising Electrification requires copper. There is no way around it. We will need a lot more copper to build electric vehicles (EV’s), windmills, and solar panels. It can take up to 3.5x as much copper to build an EV than it does to build an internal combustion engine.* Most major auto manufacturers are announcing capital programs in the tens of billions of dollars to further electrify their fleet. General Motors has committed to go all EV by 2035. Acerbating this backdrop for copper, we expect growing demand from China as it continues to electrify its economy. China, we fear, appears on path to absorb all available copper supply, leaving little left for the rest of the world. Other emerging markets, such as India, continue to urbanize. Even here in the US, the new Biden administration is advocating for renewed infrastructure investment. Other developed countries are also seeking to upgrade their aged grids after years of neglect and under-investment. Supply Constrained Unfortunately, the supply of copper is limited. It is not easy to bring on a copper mine. It can take five to ten years to find, permit, and develop a new mine. Ironically, some of the regulations imposed in the name of protecting the environment could impede the copper production necessary to transition to a greener economy. For these reasons, there is very little new mine capacity slated to come on line. Goldman Sachs believes we could reach peak copper mine supply within three years. By the end of the decade, this could result in the largest gap between supply and demand in history according to Goldman.** To close that gap, prices could move meaningfully higher to incentivize new supply additions. Not All Worth the Green Copper-related investments are merely one example of opportunities that Fielder is finding amidst the shifting economic and political landscape. There are, of course, other natural resources that benefit from this same “greening” trend. Some we find compelling, others we do not and are actively avoiding. We welcome any contrary or additive thoughts that you have on this subject. You (our smart clients and friends) are our best natural resource! Yours in the Field, Frank Byrd, CFA Steve Korn, CFA *According to Wood Mackenzie. **Goldman Sachs Commodities Research, Nicholas Snowdon, "Copper: Charting a Course to $10,000/t", December 1, 2020. PLEASE NOTE: Copper is a volatile commodity, and as such, the price could drop meaningfully from current levels – even if our thesis is correct longer-term. Our thesis may also prove wrong in the long-term as well. Investing is an exercise in probabilities, not certainties. Accordingly, investing involves risk, including the potential of complete loss of principal amount invested. Fielder offers no guarantees or promises of success. This note is provided solely for educational purposes on a broad asset class. Investing in this asset class may be inappropriate for your particular circumstance. Nothing herein should be construed as a recommendation to buy or sell any securities. Disclaimer: While the information presented herein is believed to be accurate, Fielder Capital Group LLC (Fielder) makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in this email or any attachments. Fielder is under no obligation to notify you of any errors discovered later or of any subsequent changes in opinions. Fielder’s employees are not attorneys or accountants and do not provide legal, tax, or accounting advice. Financial planning and investment strategies have the potential for loss. It should not be assumed that any of the securities, transactions, or holdings discussed will prove to be profitable in the future or that investment recommendations or decisions Fielder makes in the future will be profitable or will equal the investment performance of the securities discussed herein. Investing involves risk, including the potential of complete loss of principal amount invested. Fielder offers no guarantees or promises of success. Nothing herein should be construed as a recommendation to buy or sell any securities. Fielder or its employees may have an economic interest in securities mentioned herein. This information is intended only for the recipient of this email. Under no circumstances should this report be shared with or forwarded to anyone else without the express permission of Fielder.

"If you reveal your secrets to the wind, you should not blame the wind for revealing them to the trees.” ― Kahlil Gabran We recently learned something important from a cyber security expert. Below, we share some practical tips you can implement quickly and simply. If you're like me, all the news coverage over cyber security induces far more anxiety than bumpy stock markets. Every day I'm reminded that some Russian cyberpunk may be hacking my bank account. Every day I'm reminded that there's a list of 20 confusing, time-consuming "best practices" that I'm supposed to employ to protect myself. No wonder we're all a bit dazed and confused when it comes to cyber security. We're comfortably numb. That's dangerous. Cyber security expert Ranulf Green visited Fielder's office recently to share some thoughts. We asked him a simple question: "How would you advise your own mother to protect herself?" You can hear his full answer in our podcast interview HERE: Start with a digital cleanse. That's the first thing we learned. Basically, it reboots your online security. We strongly urge you to do this now: Create a brand new email address. (Use something other than your name in the address. For example: lovemydog@gmail.com.) Store the password for this new email account in your head (or somewhere just as safe) -- never on your hard-drive, like in a Word document. That's bad. Log into each of your sensitive accounts (such as your bank, Schwab, Apple, and your mobile phone carrier). Change the email address of record for each of these sensitive accounts to your new email address. While you're at it, change the passwords to each of these accounts. Be sure that each account gets its own UNIQUE password with 12+ characters. Store these new passwords in a password manager (such as LastPass) - never on your hard drive. Treat this new email address as sacred. Use it only for sensitive accounts. Never share it with the random retailer that asks for an email address. Give them your old email. Take a deep breath. Enjoy the peace of mind. This cleanse is just a start. It is not a panacea. Here are other MUST DO's that Ranulf urges: Create complicated, unique passwords and store them in a password manager (such as LastPass). Enable Dual-Factor Authentication (DFA) for all sensitive accounts. Be on guard for “phishing” emails. They are getting craftier. Beware also of phishing texts and even phishing phone calls ("Hi, this is Microsoft calling"). Install malware and virus software. Keep all software up to date. Set your operating system to auto-update on both your PC and mobile device. Don’t buy non-brand name peripherals (like security cameras, printers, etc.). Given all the high-profile data breaches, you should assume that a criminal can purchase a complete dossier on you. This could include your social security number, your email address and password, your mother's maiden name, the name of your first pet, and other information routinely used to guard your most sensitive accounts. This is why you need to do the cleanse above. You should also invest the time to read our guide "Protecting Your Identity, Data, and Assets" which you can read HERE. At Fielder Capital, we are committed to helping our clients better protect one of their most important assets: their sensitive personal and financial information. Let us know if we can help. Yours in the Field, Frank Byrd, CFA Disclaimer: While the information presented herein is believed to be accurate, Fielder Capital Group LLC (Fielder) makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in the document. Fielder is under no obligation to notify you of any errors discovered later or of any subsequent changes in opinions. Nothing herein should be construed as a recommendation to buy or sell any of these securities. It should not be assumed that any of the securities, transactions, or holdings discussed will prove to be profitable in the future or that investment recommendations or decisions Fielder makes in the future will be profitable or will equal the investment performance of the securities discussed herein. Fielder or its employees may have an economic interest in securities mentioned herein.

"The best fighter is not a Boxer, Karate or Judo man. The best fighter is someone who can adapt on any style.” ― Bruce Lee Dear clients and friends: Four years ago, I announced that Fielder was entering the business of helping individuals and families manage their assets and financial affairs. Why enter this business? The Inspiration (or Exasperation) After the 2008 financial crisis, friends and relatives often asked me what they should do with their money. Some shared what their financial advisers were recommending. It made me cringe. Many of their strategies struck me as naïve extrapolations of the past rather than forward-thinking. It seemed like people were paying high fees for questionable advice that was riddled with conflicts of interest. Then I got mad. It made me recall what happened to my grandparents. Growing up I watched them slowly go broke. Initially, they were quite wealthy. My grandfather sold his cotton seed oil business in the 1960s and retired. He figured that he had more than enough money to live off his interest. Through a combination of poor planning and inflation, their wealth dwindled. By the time my grandmother reached her 80s, she was broke. How did this happen? What could they have done differently? These questions haunted me as a young man. After the financial crisis, I realized that many people faced a similar type of threat. Central banks were engaging in unprecedented financial repression, robbing savers of interest income and inflating asset prices. People desperately needed thoughtful, objective guidance. Rather than rise to meet this demand, many traditional firms seemed too wed to their lucrative, conflicted legacy business models. Moreover, the world was changing. I realized that if I was going to thrive – and help others thrive – I needed to change too. I could not afford to be anchored to legacy business models, cost structures, or mindsets. I needed an independent mindset, a totally flexible investment mandate, and a low-cost structure. In short, I needed to be adaptable. This is why I launched Fielder’s private wealth business four years ago. I wanted to help people in a way other firms appeared unable or unwilling to do. What the Billionaires Do Billionaires often hire their own Chief Investment Officer (CIO) to manage a dedicated “family office”. The family office works for the billionaire, not a bank or brokerage firm. It decides if and how to use firms like JP Morgan or Goldman Sachs (and shields the billionaire from their sales pitches). The family office also advises in other areas such as insurance, debt, and estate planning. Fielder aims to provide this type solution to families who do not have the scale or appetite to build and manage their own family office. Rather than a single family bearing the full expense of our infrastructure, it is shared among our collective client base. Over the past four years, Fielder has grown from serving one client to 37 client families. We manage over $185 million on their behalf. Our capabilities have grown significantly as well. Last year, Steve Korn joined as a Partner. Steve and I have known each other for over 20 years. He brings significant and relevant experience. Before Fielder, Steve was a CIO for two separate family offices. Adaptation Markets, economies, and politics have changed – and are changing – dramatically. Now is not the time for extrapolating the past into the future. We must adapt to a new environment. Consider … The Past 4 Decades: Since the early 1980s, we have been blessed with favorable demographics (baby boomers and women entering the workforce), falling interest rates, falling tax rates, and rising risk appetites. This gave us the gift of rising asset prices (stock, bonds, real estate, etc.). The Present: Yesterday’s mid-teens interest rates have fallen to today’s zero bound; yesterday’s workers are today’s retirees; yesterday’s free-market politicians are today’s populists. Central banks are experimenting with more aggressive financial repression. Interest rates in Germany, Japan and other major economies are now negative. That means savers literally pay to own a bond. Not that this necessarily foretells hardship ahead. Perhaps we are blessed with low inflation and steady growth for years to come. It is possible. But so is the opposite. Our mandate is to help clients balance their assets in a way that contemplates different potential future paths. We think about potential downside, while seeking to maximize exposure to the serendipity of human innovation and progress. The only way to thrive in a fast-changing, uncertain world is to be adaptable. We must evolve. One way we’re doing that is with Direct Indexing. We recently obtained a new software solution that enables us to tailor an index with a basket of individual stocks rather than using an ETF or fund. This lets us proactively harvest tax losses while still closely tracking the underlying index. Hypothetically, a client may be able to realize tax losses even if their index portfolio is up in a given year.* Another area in which we continue to enhance our capabilities is alternative investments. We believe that some of the best opportunities may come outside of public markets. Steve Korn has led our search for attractive opportunities off the beaten path, such as in private equity or real estate. Over the past four years, we have earned the trust of our 37 client families. This inspires us. It energizes us. We are excited to continue building on that trust in the years ahead. Respectfully, Frank Byrd, CFA *Direct indexing may not be cost effective below certain account sizes. Further, loss-harvesting might not provide any tax advantages in some account types. Thus, we do not use direct indexing for all clients or accounts. Disclaimer: While the information presented herein is believed to be accurate, Fielder Capital Group LLC (Fielder) makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in the document. Fielder is under no obligation to notify you of any errors discovered later or of any subsequent changes in opinions. Nothing herein should be construed as a recommendation to buy or sell any of these securities. It should not be assumed that any of the securities, transactions, or holdings discussed will prove to be profitable in the future or that investment recommendations or decisions Fielder makes in the future will be profitable or will equal the investment performance of the securities discussed herein. Fielder or its employees may have an economic interest in securities mentioned herein.

The past week has been a painful reminder that we live in an uncertain world. As Fielder looks to the future, we want to fortify our client portfolios and our operations to best navigate a fast-changing world. This 4-minute video outlines our thoughts on both fronts: Fielder is excited to announce that we are relocating our team and office to Nashville. This move will position us to serve our growing clientele across the US from a more central and cost-effective location. We will maintain a New York presence and expect to be there often for client meetings (once COVID passes). On the economic front, we believe the rate of change will accelerate. This will upset the old-world order, yet create new opportunities for the enterprising. There's a new sheriff in Washington. That's a positive for some investments, a negative for others. Being thoughtfully selective will win. Now is not the time to follow yesterday's game plan. It's a new game with new players and new rules. Ultimately, we are pragmatic optimists. We believe the greatest innovation and growth of our lifetime is ahead of us, not behind us. Personally, I am very excited about the future for my 4-year-old son. On that note, our team sends you our best wishes for a far happier New Year ahead! Cheers, Frank Byrd, CFA, CFP® Stephen Korn, CFA IMPORTANT DISCLAIMER: Fielder cannot promise any investment result. Every investment strategy has the potential for profit or loss. All investing involves risk including even the complete loss of invested principal. While the information presented herein is believed to be accurate, Fielder Capital Group LLC (Fielder) makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in the document. Fielder is under no obligation to notify you of any errors discovered later or of any subsequent changes in opinions. Nothing herein should be construed as a recommendation to buy or sell any of these securities. It should not be assumed that any of the securities, transactions, or holdings discussed will prove to be profitable in the future or that investment recommendations or decisions Fielder makes in the future will be profitable or will equal the investment performance of the securities discussed herein. Fielder or its employees may have an economic interest in securities mentioned herein.

“The value of money is not the only thing that might evaporate once people stop believing in it. The same can happen to laws, gods and even empires. One moment they are busy shaping the world, and the next moment they no longer exist." - Yuval Noah Harari, Homo Deus Ten years ago, I founded Fielder Capital. My vision was that the world was changing. And the investment advisory business was changing with it. Lower fees, transparency, customization, and better aligned incentives were in. High-fee cookie-cutter solutions with perverted incentive structures were out. Technology was the driving force. Rather than launch a "robo-advisor" to replace humans, I believed the better answer was "cyborg". Namely, equipping human beings with better technology to make them faster, smarter, and importantly, more human. This would empower advisers to serve more people and do more for them. Ten years later, our team at Fielder proudly serves over 50 client families across the country. We're striving to continue adding more value and services to our clients. Tery O'Malley recently interviewed me for his "Operational Leaders" podcast. We discuss my path from hedge fund management to founding Fielder. Tery is the former Chief Administrative Officer, General Counsel, and Chief Compliance Officer at Blue Ridge Capital, a pre-eminent multi-billion dollar hedge fund firm in its day. Today Tery advises money managers on the business of managing money. In our podcast, we discuss how the investment business is evolving and how this is forcing professionals like us to evolve with it. Harari warns in his book Homo Deus that we are in the midst of a data revolution. Yet, he notes, "All truly important revolutions are practical...  Ideas change the world only when they change our behavior." Here's to being practical and changing our behavior for the better. Yours in the Field, Frank Byrd, CFA, CFP® Disclaimer: While the information presented herein is believed to be accurate, Fielder Capital Group LLC (Fielder) makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in the document. Fielder is under no obligation to notify you of any errors discovered later or of any subsequent changes in opinions. Nothing herein should be construed as a recommendation to buy or sell any of these securities. It should not be assumed that any of the securities, transactions, or holdings discussed will prove to be profitable in the future or that investment recommendations or decisions Fielder makes in the future will be profitable or will equal the investment performance of the securities discussed herein. Fielder or its employees may have an economic interest in securities mentioned herein.

“The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust." - Satoshi Nakamoto, creator of Bitcoin We believe that Bitcoin has hit an inflection point this year that makes it an increasingly attractive speculation as a hedge against continued monetary debasement by central banks. For the past five years Fielder has held gold as a core part of most client portfolios. Looking forward, however, we believe that clients should at least consider whether a small allocation to crypto assets might be an effective complement to gold as an inflation hedge. Below we share our reasoning and encourage any thoughtful or contrary feedback you might have.  Fielder’s best resource is our thoughtful clients and friends who help us source and evaluate compelling ideas. From Grains to Gold to Decree Money has two primary functions: 1)  It is a medium for exchange 2)  It is a store of value Over the course of centuries, buyers and sellers evolved from direct barter to using various mediums of exchange, such as cattle, grain, seashells, salt, alcohol, tea leaves, and as anyone who’s seen a prison movie knows, cigarettes. While these commodities may have worked, to varying degrees, as mediums of exchange, they proved to be lousy stores of value. They were perishable and their supplies could be expanded easily. No surprise, then, that metals ultimately gained favor as the primary currency in societies around the globe. Compared to perishable commodities, metals were more durable, more supply constrained, more easily divisible, and best of all easier to carry around in your pocket (and easier to conceal from would be thieves). Among metals, gold ultimately became the most popular currency across centuries and across cultures.  For this, we can thank its scarcity. (If you collected all the gold ever mined from the earth, it would not even fill up the Washington Monument.) Dinosaurs & Money As the banking industry evolved alongside paper and printing presses, it was only a matter of time before paper money appeared.  This paper was originally backed by gold or silver, though we have “evolved” past the need for that backing.  Our modern currencies are backed by nothing.  Not even a promise.  A paper dollar is a unit of exchange for sure.  It is only a store of value due to confidence of the public that it will largely retain its buying power. The point is that money has evolved, just as technology and societies have evolved. We believe that today’s fiat money will also go the way of the dinosaur.  Central banks’ progressively bolder debasement may ultimately reach the tipping point of capitulating public confidence.  This concept of tipping point is important.  It is why, historically, high inflations have come suddenly and by surprise.  All is fine, all is fine, all is fine, and then, “Wow!” As societies have historically reached such tipping points, they adopt the use of a new “good” money (one they trust) and shun the old “bad” money (Gresham’s Law for the nerds among you). What would this new “good” money be? It’s a speculation, of course. Several years ago, we would have unequivocally answered that it will likely be a new currency tied to gold. Unfortunately, that currency does not exist today. All developed countries are now on the fiat currency standard. What’s Changed? In the past several years, however, a new “good” money has been gaining currency. In 2008, Bitcoin was an idea. Today Bitcoin is a global currency worth ~$200 billion in aggregate market cap.  (Gold, by comparison, has a total market cap of $10 trillion.)  A few years ago, as Bitcoin soared to all-time highs, we wrote a note questioning its intrinsic value.* Since that time, Bitcoin’s price has fallen by roughly a quarter, while its probabilities of success have increased. We have seen more signs indicating that Bitcoin’s “brand” as an alternative currency may be reaching a tipping point. A “good” currency should be scarce, fungible, divisible, durable, and broadly accepted.  Bitcoin checks all of these boxes easily with the exception of being broadly accepted. Kinda. About 60 million people have bought Bitcoin.  While that would not yet qualify Bitcoin as “broadly accepted”, the trend appears to be heading there.  One thing is for sure:  Bitcoin is the only digital currency with any significant adoption.** Most importantly, Bitcoin is decentralized so it cannot be controlled or devalued by one government. It is programmable and might serve other functions to facilitate commerce over time besides just storing value. The Key Question We believe today’s global experiment with fiat currencies will end poorly. Temptation has led to debasement.  History is full of case studies of currency debasement. They don’t end well. The question is what alternative currency do we believe the public will most likely deem the best new “good” money?  Which has the best odds of being the best alternative store of value and means of transacting? A modern, digitally connected society is most likely to adopt a modern, digital money. This choice will come bottom-up from the people, rather than top-down from their government. (History shows this repeatedly.) Which would the people choose? Likely one that will have already been widely accepted at the time.  Today, Bitcoin is the only digital currency that meets that hurdle. Perhaps another emerges. But the barriers are rising given the natural network effects of currencies. Thousand-Year Bubble Some have called Bitcoin a bubble.  Robert Shiller has called gold a bubble that has lasted thousands of years.  Gold does not have any real industrial uses of size. Money is ultimately what someone is willing to think its worth. The past 50-year experiment with fiat currency proves that. In the case of Bitcoin, it can easily be worth 0. However, as more and more individuals and institutions adopt it there is a network effect on acceptability. Given the relatively small total value of Bitcoin vs Gold, and other stores of value, there are many bitcoin bulls that argue for values of 10-100x from here. We don’t have a strong view of an ultimate value. However, as an example, if Bitcoin were to trade at 50% of the value of gold it would have to go up 25x from here. Here is a sampling of recent signposts illustrating the increased acceptability of Bitcoin: US banks are now allowed to custody Bitcoin for clients. (Source)  This is giving rise to newer, more secure, and more convenient ways to hold crypto assets.  This makes it more practical for investors (and their advisers) to choose to invest in Bitcoin.  We expect this could lead to a new plateau in demand and drive prices higher. Switzerland will accept Bitcoin as a form of payment for tax purposes. (Source) The Norwegian pension ($1 trillion in AUM) recently began investing in Bitcoin. (Source) Corporations like Microstrategy are holding their cash value in Bitcoin. (Source) A “Great” Speculation Legendary investor Paul Tudor Jones recently called Bitcoin a “great speculation” in an interview with CNBC.  He’s put almost 2% of his assets invested in it as a hedge against future inflation.  “Every day that goes by that Bitcoin survives, the trust in it will go up,” he stressed. This compounding of trust effect is key. Unlike gold, Bitcoin has not stood the test of time. It is the new brand, just as gold itself was centuries ago. Like any speculation, Bitcoin could ultimately prove worthless. For this reason, it may not be appropriate for every investor. Situations, philosophies, and temperaments vary from client to client. For certain clients, however, Bitcoin may be appropriate as a small allocation to complement their other inflation hedges such as gold.  While Bitcoin could be worth zero one day, it may also be worth substantially more if current trends continue. Fielder has owned gold as a core position for the vast majority of its clients for the past five years. We continue to hold gold today as an alternative currency that we expect will prove immune to long-term inflation. Moving forward, we will also be discussing with clients individually if an allocation to cryptocurrency might be appropriate for their portfolios. Let us know if you’d like to schedule a conversation to discuss this. Regards, Frank Byrd, CFA, CFP®                Stephen Korn, CFA *See Bitcoin: A Framework for Its Potential **Ethereum is a distant second in terms of adoption, but we see it as a digital commodity as opposed to a digital currency. Bitcoin is effectively the only digital currency with any significant adoption as of today. Fielder is an independent, fee-only adviser that provides asset management and family office services. IMPORTANT DISCLAIMER: This note is for educational purposes only. It is not a recommendation to invest in Bitcoin. Rather, it is to educate investors on why Bitcoin is worth investigating as a potential investment. It is speculative in nature. It may thus be completely unsuitable for some investors. Speak with your financial adviser before investing. Fielder cannot promise any investment result. Every investment strategy has the potential for profit or loss. All investing involves risk including even the complete loss of invested principal. While the information presented herein is believed to be accurate, Fielder Capital Group LLC (Fielder) makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in the document. Fielder is under no obligation to notify you of any errors discovered later or of any subsequent changes in opinions. Nothing herein should be construed as a recommendation to buy or sell any of these securities. It should not be assumed that any of the securities, transactions, or holdings discussed will prove to be profitable in the future or that investment recommendations or decisions Fielder makes in the future will be profitable or will equal the investment performance of the securities discussed herein. Fielder or its employees may have an economic interest in securities mentioned herein.

"We mustn't lose touch with those moments of history, which are really quite chaotic and volatile… The idea that the worst thing that can happen after 2% inflation is 3% inflation, I would argue against that.” -Peter Warburton Peter Warburton visited Fielder’s office several weeks ago when he was in New York from London. Peter wrote Debt & Delusion in 1999, identifying the stresses in the financial system that culminated in the 2008 credit crisis. The book is hauntingly prophetic. Peter is a true independent thinker. Few have thought more deeply and creatively about money, credit and inflation than Peter. His unique framework leads to some highly contrarian views. They may or may not prove correct, but they deserve serious consideration and debate. Excerpts from Peter’s comments follow below. You can listen to the full conversation HERE. The Illusion of Safety Peter: “What I'm suggesting is that we're not on a stable course by any means. Although interest rates are low, and a lot of borrowers will feel relatively comfortable... I think it's an illusion. I think that we're storing up a lot of credit that potentially can go wrong.” A Dangerous Muscle Memory Peter: “We've been very conditioned by low inflation. We've been very blessed to live through a period of low inflation. But we mustn't lose touch with those moments of history, which are really quite chaotic and volatile. So I don't want to rule out there being a time when the price level changes really quite dramatically… Effectively, like pressing a reset button, it means that those pension assets may be worth 30% less… The idea that the worst thing that can happen after 2% inflation is 3% inflation, I would argue against that.” End of the Party Peter: “The conjunction here is also that we've stoked up a very hot labor market, where potentially wage inflation could break out to the upside in a way that certainly is not commonly expected… If you are a struggling company and you're paying those wages, then your ability to service your debt is going to go the other way. So I think we're much closer to a new default cycle. And I think that potentially that could cause a lot of distress. And if there are other forces bringing the global economic cycle to an end (Frank: like trade wars), then an adjustment in the price of credit and credit spreads could greatly aggravate the adjustment process.” Average Hourly Earnings The Fed/Markets Get Side-Swiped Peter: “If I'm right that wage inflation still has more progress to make; if I'm right that the structural forces of inflation will keep core inflation high… then the Fed will be in a very difficult position. It would be biased to confirming (market expectations of) lower rates, whilst at the same time facing pressures (to raise them)... So I think that the Fed will be in a real bind potentially sometime in the next six months…” “Why have the global stock markets had a very good first quarter? Well, it's basically that liquidity conditions improved in a way that that was not anticipated… But what I warn is that some of these factors, which have boosted liquidity and helped to make risk-taking more attractive, that they could turn on a dime. And so I think this is a very fickle time to be involved in equity markets right now.” “Revolutionary Change” The World as We Know It: Peter: “There is the happy agreement around what the central bank does to control inflation, what the government does to control its budget… I could see that sort of framework being torn up… This setup is just not working for a large enough majority -- or even a majority -- of the voting citizens of our democracies.” A World We Haven’t (yet) Known: Peter: “We're vulnerable to elect parties and policies which are very experimental. But they're experimental in a different way to the ones that we had after the financial crisis. (During the next) downturn or corporate debt cycle ... I think whatever subsidies come out of federal government - whatever protections come out - they'll be directed to the citizens, not to banks or institutions. What we're talking about is a liquidity experiment of some sort that makes regular folks feel a lot better - but whose systemic implications could be quite drastic. … In other words, that we leave behind the world where the central banks are the masters of the universe - the guys in charge - the fulcrum of the system. We basically relegate the central banks. We disregard their recommendations, we disable them and their executive functions, and we basically say, 'We're going to run the show. We're going to spend the money that needs to be spent, and we're going to build the bridges. We're going to pay the workers, and we'll deal with the consequences somehow.'” The Rest of the Story You can listen to our full conversation with Peter Warburton HERE. Peter shares his thoughts on the following questions: In his dystopian scenario, what could this mean for investors? Would stocks do poorly ... or well? What types of companies would fare best/worst in such a scenario? If you have any additive or contrary thoughts on Peter’s comments, we’d love to hear them. Our best resource is our network of thoughtful investors and friends. As always, please reach out if you’d like help in thinking through the optimal allocation of your own capital in these uncertain times. Yours in the Field, Frank Byrd, CFA Stephen Korn, CFA PS: You can learn more about Peter Warburton's research firm at Economic Perspectives. Disclaimer: While the information presented herein is believed to be accurate, Fielder Capital Group LLC (Fielder) makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in the document. Fielder is under no obligation to notify you of any errors discovered later or of any subsequent changes in opinions. Nothing herein should be construed as a recommendation to buy or sell any of these securities. It should not be assumed that any of the securities, transactions, or holdings discussed will prove to be profitable in the future or that investment recommendations or decisions Fielder makes in the future will be profitable or will equal the investment performance of the securities discussed herein. Fielder or its employees may have an economic interest in securities mentioned herein.

As the media coverage intensifies over coronavirus (CV), we are compelled to share some under-reported observations and some variant thoughts. We’ll cover:​ On the Bright Side What Actually Worries Us Lies, Damn Lies, and Multiplied Probabilities Packed Subways and Empty Classrooms OK, Now What? On the Bright Side There is little doubt that the headlines on CV will get much worse in the US. We are just now beginning to test people. The more tests we do, the more CV infections we’ll report. Expect to see hundreds and ultimately thousands of infections reported. But does this mean we ultimately see mass infection? Harvard’s Marc Lipsitch thinks so. He’s been on the media circuit prognosticating that we could see 40-70% infection rates globally. Extraordinary claims require extraordinary evidence, as Carl Sagan once insisted. So far, we have yet to see evidence that mass infection rates are inevitable. The data we do have seems to indicate just the opposite. Consider: China’s data suggests the virus there is under control. The number of new infections in China has been in steady decline. . . Source: World Health Organization If the virus is truly under control in China, we are less worried that it might spark a credit crunch in China's fragile economy. Granted, we should be suspicious of Chinese data. It may be entirely fabricated. Let’s concede that. Thankfully, we can look at more reliable data in the next most infected country, South Korea … South Korea’s data tells a similar story. The number of new infections reported in S. Korea has leveled off and appears to be trending toward decline. Source:  World Health Organization Remember that S. Korea ranks second behind China for number of infections.  Thanks to aggressive testing and quarantines (shutting schools, factories, etc.), S. Korea looks like it's under control. Keep this in mind as you read doomsday reports:  In S. Korea, the second largest infected country behind China, only 1/100 % of the population was infected.  And now the country appears stabilized. Watch Italy closely. The third largest country in terms of infections, Italy, has not yet gotten the problem under control. It is too early to tell when they might stabilize. This weekend they announced widespread, dramatic measures, including limiting travel for over 1/6th of their population. We will be watching Italy carefully to see whether the rate of new infections stabilizes. Source: World Health Organization What bears emphasizing is that we have yet to see infections spiral out of control (or "hockey stick") to a degree that that would support Dr. Lipsitch's predictions. That does not mean it cannot happen. We will thus calmly continue to seek extraordinary evidence that suggests it might. What Actually Worries Us What we do worry about is the potential of a domino effect, with each of the following events triggering the next in succession. Odds are high that someone in your company, school, or church/synagogue will catch the virus. The momentum in public fear could meaningfully accelerate in the US. Compliance/legal/regulatory professionals would likely err on the side of caution and aggressively assert “CYA” measures.  This will protect their constituencies, but at the cost of materially curtailing public activity and hence our economy. We could get a supply shock as economic output slows. Easy-to-get credit could become hard-to-get credit, which chokes weak, indebted companies. This amplifies the supply shock as capacity shutters. Central bankers “go nuclear” printing money. The combination of the declining supply of goods with expanding supply of money could lead to an inflation shock.  Investors would likely shift from fearing deflation to fearing inflation, which would cause significant losses in the value of long-term bonds. Lies, Damn Lies, and Multiplied Probabilities Importantly, we need to remember that the above events are conditional (meaning each depends on the prior event happening). We thus need to be mindful of the impact of multiplying probabilities. Even if we believe that there’s a high probability of each event occurring (say 80%), there would be less than a coin-toss chance of being right. (80% * 80% * 80% * 80% = 41%) Here’s another thing to keep in mind: Many of the statistics being parroted in the media are meaningless in isolation as so often presented. Rarely is there any mention of confidence intervals or statistical significance. Granted, the public wants numbers. Clean and easy numbers. The unfortunate truth is that we simply don’t have good data on this virus yet. No one knows the true fatality rates since no one knows exactly how many people are truly infected. And even if we knew that, it’s too early to know how many will ultimately die. A study just published jointly by the University of Hong Kong and Harvard’s school of public health puts the death rate at 1.4%. One of the lead researchers explicitly notes that this death rate would be lower if the calculation took into account infected patients who did not show symptoms. Packed Subways and Empty Classrooms Anecdotally, we were surprised to see complacency this week despite the dramatic headlines and market action. The subways were crowded as ever. We witnessed people sneezing or coughing, yet those nearby made no effort to move away. We heard lots of comments from friends and family like, “This isn’t worse than the flu.” In response, we say, "Get ready. Even if your personal odds of catching it are very low, your life is about to get turned upside down by this." Until this past week, very few people have been tested in the US. Now hundreds of thousands of test kits are becoming available across the country. Expect to see the number of confirmed cases rise dramatically in the US in the weeks ahead. Sentiment has finally started to shifting in past few days (we fear) from one extreme to the other. A school in Westchester announced this week that it was closing for two days to sanitize its buildings. This wasn't because a student or family member had the virus. Rather, a parent was merely “present in a location that was closed due to contact with a person who is under quarantine from the coronavirus”. On Friday Columbia Business School canceled the upcoming 20-year reunion for our class. This type of “CYA” overreaction is what we fear far more than the virus. When someone cries “fire” in a crowded theatre, the bigger danger can be the stampede of other people more so than the fire. OK, Now What? A question we’ve gotten a lot the past week: “Prices are cheaper, should we be buying?” It depends. Surprisingly, in the case of high yield bonds, we have yet to see compelling value. Spreads have widened, but nowhere near what we’d have expected. Stocks, of course, are cheaper, though are nowhere near bargains. The S&P 500 is down approximately 13% from recent highs, but it’s still above where it traded just several months ago. There are, however, some areas within equities that do look compelling. We may be adding selectively in these areas where appropriate for individual clients. The bond market has had the biggest move of all. Treasuries are pricing in a combination of fear and deflation. We would look to those assets as a source of capital should we get more meaningful dislocations in credit spreads and equity prices. We continue to watch this closely. We’ve been devoting most of our thinking to reconsidering portfolio structures and asset allocation frameworks. We have historically endeavored to think differently in this regard. Many investors employ traditional portfolio strategies based upon extrapolations of history (returns, risk and correlations) into the future. Admittedly, this worked in the past, but we cannot figure how it can work going forward. It is mathematically impossible given where interest rates are now. We believed this two years ago, and today our conviction is magnified. Now, more than ever, we need to be driving forward, looking closely at the road ahead, not in the rear-view mirror. We will keep you posted as we learn more and as our thinking evolves. In the meantime, please reach out with any questions. Yours in the Field, Frank Byrd, CFA Steve Korn, CFA Disclaimer: While the information presented herein is believed to be accurate, Fielder Capital Group LLC (Fielder) makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in the document. Fielder is under no obligation to notify you of any errors discovered later or of any subsequent changes in opinions. Nothing herein should be construed as a recommendation to buy or sell any of these securities. It should not be assumed that any of the securities, transactions, or holdings discussed will prove to be profitable in the future or that investment recommendations or decisions Fielder makes in the future will be profitable or will equal the investment performance of the securities discussed herein. Fielder or its employees may have an economic interest in securities mentioned herein. Odds are high that someone in your company, school, or church/synagogue will catch the virus. The momentum in public fear could meaningfully accelerate in the US. Compliance/legal/regulatory professionals would likely err on the side of caution and aggressively assert “CYA” measures. This will protect their constituencies, but at the cost of materially curtailing public activity and hence our economy. We could get a supply shock as economic output slows. Easy-to-get credit could become hard-to-get credit, which chokes weak, indebted companies. This amplifies the supply shock as capacity shutters. Central bankers “go nuclear” printing money. The combination of the declining supply of goods with expanding supply of money could lead to an inflation shock. Investors would likely shift from fearing deflation to fearing inflation, which would cause significant losses in the value of long-term bonds.

Your hard-earned capital is stored labor. It represents the virtues of hard work, thrift, and delayed gratification. It thus deserves to be honored today. Happy Labor Day! Unfortunately, your stored labor is being repressed and forced to work over-time. The Lemon Economy Washington’s policy response following COVID is not so radically new. It’s better described as a radical acceleration of the old policy – that is, the policy in place since the 2008 financial crisis. The Federal Reserve has pressed interest rates even lower. No longer content to keep just short-term rates low, it now aims to keep longer-term rates repressed as well. This is being done by expanding its purchases of US government and agency bonds (itself a radical departure in 2008) to now include municipal bonds, corporate bonds, and even fallen angels (a polite term for junk bonds). Last year, you could earn 1.70% on a one-year treasury bond. Today, you earn just 0.13% on that same bond. You won’t earn much more on higher-risk corporate bonds. For this, you can thank the Fed’s recent buying spree. It is a stealth tax on capital. As with 2008’s radical intervention, today’s is meant to be temporary. Long after the financial crisis, the Fed kept rates near zero. We suspect that today’s emergency COVID policies will ultimately be longer-lived than anyone in Washington will admit publicly. If that proves to be the case, we must prepare for an economy wherein downside risk is socialized (paid for by taxpayers and Fed printing), while upside profits remain privatized. In the 1974 Mark J. Green coined the phrase “lemon socialism” to describe this state of affairs. Our views of this lemon policy – whether it proves effective, or is fair, etc. – is a moot point. (No one from Washington called Fielder’s offices to solicit our feedback. Can you believe it?) We, like investors everywhere, simply need to adapt. These are the new rules of the game. We need to accept them and figure out how to navigate best that we can. The Fed’s intervention has repressed interest rates on most bonds and fixed income to the point that it no longer makes sense to buy them. Treasuries used to provide a risk-free return. Today we see long-term treasuries as offering return-free risk (as Jim Grant once quipped). That is, they expose us to far greater risk (namely inflation) than we are being paid in interest to compensate for that risk. The same holds true for most of the assets the Fed is now buying (repressing). Where’s the Lemonade? To find fixed income with attractive returns relative to risk, we must look in areas where the Fed is not actively propping up prices and repressing yields. To find "true" yields we have to identify securities where prices are still determined naturally by buyers and sellers (markets) rather than by technocrats. This means areas outside of government, municipal, and most corporate bonds. It also includes where banks cannot or will not loan money. For example, alternative lenders, such as investment funds and business development companies (BDCs), invest in or structure secured loans to private companies. There are also some high-dividend equities that we believe are compelling alternatives to bonds today. All of these alternatives involve more risk than treasuries, to be sure, but they pay us substantially higher yields -- yields that, in many cases, we judge attractive compensation for the risk. Any one of these alternatives may or may not be appropriate for you or any specific client. They are something that should be considered on a case-by-case basis, and only as one small component part to a broader portfolio allocation. For that reason, we plan to select and size these alternatives within the appropriate risk parameters for your specific portfolio. Our goal moving forward is to invest where the government is not actively distorting prices and repressing yields. Fielder will continue to identify and research these types of alternatives. We will be discussing with clients shortly how these alternatives can be implemented in their portfolios. Please, as always, let us know if you have any questions or would like to discuss your portfolio. Happy Labor Day! Frank Byrd, CFA, CFP® Steve Korn, CFA PS: In case you've not yet seen it, we encourage you to watch the 6-minute video we shared two weeks ago. It provides more context on this subject. HERE is the link: Fielder is an independent, fee-only adviser that provides asset management and family office services. Disclaimer: While the information presented herein is believed to be accurate, Fielder Capital Group LLC (Fielder) makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in the document. Fielder is under no obligation to notify you of any errors discovered later or of any subsequent changes in opinions. Nothing herein should be construed as a recommendation to buy or sell any of these securities. It should not be assumed that any of the securities, transactions, or holdings discussed will prove to be profitable in the future or that investment recommendations or decisions Fielder makes in the future will be profitable or will equal the investment performance of the securities discussed herein. Fielder or its employees may have an economic interest in securities mentioned herein.

We are fracturing. Not just politically, but socially. It’s tempting to blame Trump or Bernie Sanders. Yet, they are merely the offspring, not the creators of this new world order. The true cause of our fracturing is a structural shift, which means we are witnessing a secular social shift, not a cyclical one. In other words, don’t sit there waiting for the pendulum to swing back. You need to get moving. There is more fracture to come. And from that, we expect three big changes to follow. If we can understand the true nature of this fracturing, we will be better equipped to position our investments – and more broadly our lives – for the changes ahead. At least, that’s the ambition. All we know is that things are changing. As investors, we don’t want to be “that guy” that invested heavily in railroads decades ago instead of Microsoft and Amazon. To understand where we are today, we first need some context… The Big Shifts What’s behind the big shifts in history … behind the revolutions? The first things that come to mind might be food shortages or scarcity of natural resources. Yet historically, that has not been the case. The fall of the Roman Empire, the French Revolution, the American Revolution, the American Civil War -- these dramatic, violent shifts came about not from starving peasants but from cultural and intellectual elites. Noah Harari, in his bestseller Sapiens, argues that human beings’ dominance of the earth is because we are the only animal that can cooperate flexibly in large numbers. This, he contends, arises from our unique ability to conceive and maintain widely held belief structures. Our collective belief in gods, nations, money, and human rights bind large groups of us together. Harari calls these belief systems myths. He does not mean that a “myth” is necessarily untrue – or foolishly fictitious like Santa Claus. Rather, he describes myths as a shared belief system, such as the US Constitution, socialism, Catholicism, or chemistry. Belief systems are an attempt to frame reality. Some myths appear to do this more accurately than others (think physics versus astrology). Harari contends that myths are the great catalyst that took us from living in small 150-person tribes to living in large cities inhabited by thousands of highly coordinated builders, farmers, and soldiers. Myths allowed mass coordinated activity. But myths can change. Just think of the myths that have evolved over history – some within our lifetime – in religion, in society, in economics and politics. Dramatic changes came about because the myths changed. Another way to think about it: as the perceptions of reality shifted, this brought about a changed reality. The Great Depression, for example, led to the creation of Social Security and Medicare. The New Myths What are the catalysts for major myth shifts? Follow the money. Money flows shift when technology shifts the dynamics of power. Overlaying this framing onto Harari’s in Sapiens shows a nice fitting correlation. For example, consider the agricultural revolution, the invention of papyrus, and the invention of the printing press. Each was concurrent with progressively larger – and more sophisticated – societies. Today we are in the midst of another major technology shift that is behind the fracturing of our society. The culprit is technology. The invention of industrial printing presses in the 1840s created scale advantages, which led to an oligopoly in the news industry. This meant that there were only one or two dominant newspapers at both the national and local levels. The same held true for broadcast TV. This dynamic meant that news organizations had an economic incentive to serve the center. That was how to maximize their revenue. Over a century after the industrial printing press changed the world, the technology has again shifted. First, it was cable TV. Then came the internet. Together, they’ve broken the economic scale advantage of the incumbent news organizations. Upstarts like Rupert Murdoch, Arianna Huffington and Glenn Beck have built fortunes bypassing traditional news oligopolies. They maximize their revenues serving niche audiences. This has crushed traditional news organizations that served the center. The only survivors among the old guard, such as the New York Times and Wall Street Journal, have fragmented and now cater explicitly to the left and right respectively. The result? We now individually curate our own news. We live in our own self-created echo-chambers. This shift in technology is quite literally breaking us. We are fracturing. As fewer people accept the belief system of America … or capitalism … or organized religion … we will fracture further. 3 Changes Ahead? Changes in belief systems are the catalysts of instability, conflict, and (on a more positive note) opportunity. It is thus critically important to identify not only which myths are dying and which are emerging, but what changes come about as a result. We believe there are three types of changes coming: Conflict: Once we had a melting pot. Now we have identity politics. Future conflicts will be more localized. Increasingly, the “tribe” with which people align themselves is defined less by geography and more by ideology. The enemy lives next door, not on the other side of the planet. We no longer see ourselves as a melting pot. We are identities. The ascending zeitgeist is to break, not to heal. Expect this to lead to greater conflict, not less. Not that this is necessarily a bad thing. Conflict can bring about positive change. Further, not all conflict leads to bloodshed; sometimes it can be peacefully resolved. Migration: People will seek to live near people who share their values. Once the COVID crisis is behind us, we expect to see an acceleration of migration initially within borders. Maps will look more crisply red and blue, and less purple. Privatization: Greater migration will create winners and losers among cities. Those losing population will see declining tax revenue, which will force cuts in services. This creates vicious cycles for losers and virtuous cycles for winners. In an effort to cut costs, local governments will be forced to outsource more services to private contractors. Further, as cities cut the quantity and quality of services, citizens will proactively shift to private companies. If my city cannot educate my kids, pick up my trash, or protect my neighborhood, I’ll hire someone else to do it … or move. That might mean hiring another city (migration) or a company. This will drive demand for private companies that provide security, trash collection, education, and other such essential services. Ironically, amidst the recent protests against capitalism, we may well see the size of government shrink – not by choice, but out of desperation. These changes will feed on themselves reflexively. Opportunity & Prosperity We want to avoid the folly of predicting the future. Rather, we are observing great change. Our goal is to understand its nature and carefully consider the best way to position our clients’ portfolios (as well as our clients' broader financial and estate plans). Pessimists will see dark times ahead from these changes. Optimists will see opportunity. We are optimists at heart, but realists by nature. What do you think? We would love to hear your own observations. Our greatest insights often come from our ongoing dialogue with our smart clients and friends. (If you get this note, you’re in the category!) What old myths do you see dying? Which new ones emerging? The safety and prosperity of our families depend on it. Very Best, Frank Byrd, CFA, CFP® Fielder is an independent, fee-only adviser that provides asset management and family office services. Disclaimer: While the information presented herein is believed to be accurate, Fielder Capital Group LLC (Fielder) makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in the document. Fielder is under no obligation to notify you of any errors discovered later or of any subsequent changes in opinions. Nothing herein should be construed as a recommendation to buy or sell any of these securities. It should not be assumed that any of the securities, transactions, or holdings discussed will prove to be profitable in the future or that investment recommendations or decisions Fielder makes in the future will be profitable or will equal the investment performance of the securities discussed herein. Fielder or its employees may have an economic interest in securities mentioned herein.