A few years back I traded my beloved Piper Cherokee for a newer, faster and more sophisticated aircraft, a Rockwell Commander. Having a value investor mindset, i.e., a frugal disposition, an opportunity was presented that allowed me to purchase the Commander at a below market price. Throughout the few years of owning and operating the Commander, I have convinced myself that the purchase was a good decision. But as the saying goes, no good decision goes unpunished, or something to that effect. Anyway, the newer aircraft is now 25 years old (my Cherokee was over 50 years old when sold) and is in need of a few modifications. Last year I upgraded the avionics and instruments with 21st century replacements. Gone are the analog flight instruments having been replaced with digital. In my mind, I believe that the alterations added safety. Some pilots may disagree.

As I write this letter, the plane is in the paint shop getting new cosmetics. This change does nothing to improve the plane’s flight characteristics or safety in any way. It’s simply an ego boost for the pilot. A casual view of an aircraft cannot tell its age or true condition. Shiney objects just look better. Regardless of the fact that the full carat diamond is a cubic zirconia, if it sparkles on a woman’s finger, its impressive to the casual observer and as any musician can tell you, nothing dates quicker than an effort to be relevant. The paint shop chosen is at Woodlake Airport, a private strip near Sandwich, Il, just west of Aurora. It’s a 15 minute flight or an hour drive from the office. Although there are many good shops throughout the country that provide this service, I wanted to be able to see the project as it progresses.

Recently, I drove out to Woodlake to satisfy my mind and to discuss the new paint scheme and colors with the shop. The plane has been stripped to bare aluminum, with all control surfaces, (allerons, flaps, wingtips) removed. It’s progressing nicely and by the time you read this letter, it should be back in my hanger and flying again. Seeing the plane in its current state is a bit unnerving. All of the control surfaces will need to be reattached precisely without any hiccups. The ports (small holes allowing the free movement of outside air into measuring devises) must remain clear for the proper function of instruments to assess airspeed, altitude and a myriad of other functions. Excess chemicals and water used to remove the old paint must not have been allowed to enter near brakes and landing gear hydraulics to ensure proper function. These and many other mistakes by the shop can have a detrimental impact upon the flying characteristics of the plane.

Although mistakes can happen, it is reassuring to know that the shop has years of experience. It is also reassuring that an aircraft mechanic with inspection authorization granted by the FAA will thoroughly inspect the plane before it is deemed flight worthy and a test pilot will fly the plane to ensure no glitches exist prior to any passengers being allowed. Not so reassuring is the fact that I will function as the test pilot. Once the project is completed, I will perform an extensive pre-flight inspection to convince myself that all is as should be. The aircraft will be cautiously taxied to the runway specifically watching for any inconsistencies. Only then will flight be undertaken. This is not the first time that I have taken on this role. But I can tell you that there is a definite pucker factor each and every time.

Not dissimilar to flight testing an aircraft, recent domestic and geopolitical events create a certain pucker factor for investors. It can be assumed that the markets will continue to be volatile as investors assess the events’ economic impact. During the markets’ history, similar events have unfolded and are not unprecedented. The world economy has traversed periods of conflict many times and each time exited those periods relatively unscathed. Although each of these events is unique, in many ways, current events are not unprecedented in reference to the markets.

We continue to believe that patience and a long-term perspective will allow our clients the best probability of reaching their goals and objectives.

As always, we thank you for your business and for your continued trust.

Sincerely,

Jack P. Cannata