Private Client Letters

The wealth our private clients entrust to our fiduciary stewardship is often irreplaceable capital; money accumulated and compounded as a result of a lifetime, or many lifetimes, of prudence, discipline, and intelligent decisions. Accordingly, the Managing Directors of the firm feel it is important for clients to understand what they own, why they own it, and how we see it fitting into the broader context of their portfolio, the market, and the economy.

One way we seek to achieve that objective is through the publication of private client letters. Unlike the firm’s private blog, the Timeline, that is accessible only when logged into the system, or shorter commentary that is occasionally published within quarterly private client reports, the private client letters are long-form communications meant to get into considerable detail about the topics, and enterprises, being discussed.

Beginning with 3rd Quarter 2022, the firm’s intention is for private client letters to be released within the private client portal no later than 21 days following the end of the quarter; i.e., April 21st, July 21st, October 21st, and January 21st, respectively. Depending upon the content, they may or may not be released on the main website the same day or at all for the convenience of our clients, many of whom have expressed they enjoy re-reading the missives from time to time and would like them in one convenient, easy-to-access place. Thus, it is absolutely essential to understand, and by downloading these letters you agree without equivocation, reservation, or objection, that:

  1. These letters are intended, and shall only be provided upon the understanding that they are meant, for existing clients to communicate about existing investment advisory services. They are not intended, and shall not be taken under any circumstance or condition, to be a solicitation of new business for either existing clients or potential clients.
  2. These letters frequently contain opinions, statements on investment strategies, the economy, market conditions, the political environment, and numerous other topics including, but not limited to, estimates of intrinsic value, revenue or earnings projections, expectations for dividend rates, share repurchases, or debt reduction, etc. There is no guarantee that these views, statements, or opinions will prove to be correct, and, in some cases given the nature of the topic, are inherently unknowable and/or speculative. None of these views, statements, or commentary should be relied upon as fact. Furthermore, views, statements, and commentary shared by Kennon-Green & Co., its owners, Managing Directors, employees, or other related parties, including those shared in private client letters, recorded interviews, or other media, are as-of the original date made, are not intended as a forecast nor a guarantee of future results, do not constitute investment advice, and are subject to change without notice.
  3. These letters do not, under any circumstance or condition, constitute investment advice as Kennon-Green & Co. always makes discretionary capital allocation decisions based upon the unique facts, circumstances, and other considerations involving each specific private client account consistent with its role as a fiduciary specializing in serving affluent and high net worth individuals and families. Even if a letter contains a note that the firm is actively purchasing a security, it may not purchase a security for a given client at all or to the same degree.
  4. Private clients have access to extensive performance details within the private client portal, including net-of-fee results over any time horizon the client wishes to see. In addition, each client’s results are unique given the bespoke nature of our high net worth services. Kennon-Green & Co. does not advertise aggregate performance figures, nor does it intend to do so at any point in the foreseeable future due to the fact the Managing Directors do not believe any given aggregate performance data is indicative of the return a client might experience or has experienced because he, she, or it will have unique facts, circumstances, and considerations surrounding his, her, or its financial needs and thus lead to different allocation decisions; again owing to the nature of serving wealthy investors. Any discussion of the performance of our clients, or a particular investment, is entirely limited to those who directly participated in those investments and is not indicative of the return any specific client earned or may earn in the future.
  5. Kennon-Green & Co. does not intend these private client letters to be advertisements and asserts that they do not qualify for the definition of “advertisements” under SEC marketing rule § 275.206(4)-1 as revised and effective May 4, 2021 in light of the above facts. If they were to be considered advertisements at any point in the future, the firm would simply stop sharing them with clients, severely curtailing the transparency about its actions, decision-making process, and what it sees as opportunities and dangers. The firm made this determination after reviewing both the text of the law and the SEC’s note in its Final Rule that it “agrees the [marketing rule] should treat only those communications that offer new or additional advisory services with regard to securities to current investors as advertisements because they raise the same concerns as other advertisements. Our intent is not to chill ordinary course communication with current investors.” , and, “We believe that this modification will allow advisers to continue to provide current investors with timely information regarding their accounts and the market without subjecting those communications to the marketing rule.” [See pages 35 and 36 out of 430]

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Historical Archives of Private Client Letters During State Registration Period

Effective July 15th, 2022, Kennon-Green & Co. transitioned to registration with the U.S. Securities and Exchange Commission (“SEC”) as a result of its growth in assets under management causing it to be classified as a “large advisory firm”. Registration with the SEC does not imply a certain level of skill or training. Those interested in learning about the firm’s history, and investment philosophy, during the period between its acceptance of private clients in late 2016 and transition to SEC registration in the summer of 2022 – that is, when it was a state-registered advisory firm and grew assets under management from $0 to $117,817,702, all of which was managed on a discretionary basis – are welcome to read selected private client letters and other communications published here for historical record.

Please note that during this period of explosive growth, the firm relocated from the Midwest to Southern California and, at various times, was registered with the States of Missouri, Texas, California, and Michigan. The expansion in operations was so rapid, and the private client base intimate enough, that, for several years, the Managing Directors would sometimes not release a private client letter during a quarter but, instead, publish updates on the Timeline blog within the private client portal, write commentary within private client quarterly reports, and/or engage in direct communication such as telephone calls and in-person meetings for clients that reached out and requested such discussions. Some of these communications may only be available to the firm’s private clients and not released to the public. These missives are intended as a courtesy to highlight our investment philosophy; to demonstrate how we seek to help our clients protect, preserve, and grow their wealth. We hope you find them valuable.

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All private client letters written by Joshua A. Kennon are copyrighted by The Kennon-Green Trust. All Rights Reserved.