One Day at a Time

Man and woman hands in knitting mittens taking cups of hot drink. Sunny winter forest glade landscape on background

One day at a time. One day at a time. This is what loops through my mind each day. Sometimes, I can only handle one moment at a time, and then I remind myself that if I can manage to string together enough moments during this pandemic, during this extremely trying political environment, during this severe recession, during this period of isolation, I might one day be able to look up and see I’ve come through to the other side. One day at a time.

Remember Back in January of Last Year

when we feared the economy might dip into a mild recession because of the ongoing trade wars with China?

Remember back in January of last year when we feared the economy might dip into a mild recession because of the ongoing trade wars with China? That dreaded prediction looks desirable from where we sit today. A run-of-the-mill economic contraction is child’s play compared to the severity of a pandemic. As awareness of that severity grew in early 2020, panic followed. The markets fell precipitously for three straight weeks. If felt like we were helplessly watching a slow-moving train wreck and wondering if there were any possible way to avert a crash.

Good information was hard to come by; the pandemic revealed a major flaw of our beloved Information Age: misinformation spreads just as easily, and often much more rapidly, as facts do. Our personal browsing choices and favored “news” sources create echo chambers. Once we step off the path of reliable news sources, we sink into a quicksand of sources promoting false or misleading statements. Instead of directing us back onto solid ground, many of our political leaders guided us further into the mire. Making wise choices and doing the right thing can be challenging in the best of times. It is nearly impossible when given inaccurate information. Overwhelmed by the pandemic and exhausted trying to discern reality from fiction, many of us inadvertently outsourced our critical thinking skills and simply accepted what we were told. This didn’t help.


Ultimately, governors across the nation shut down states in an effort to save lives. After agonizing months of stay-at-home orders, the virus retreated. Healthcare workers breathed a sigh of relief, and hospitals returned to running smoothly. The weather started to improve, and we could finally enjoy some normal outside activities. The economic damage, however, was done, and it was extensive, rivaling the early days of the Great Depression. Unemployment skyrocketed at an unprecedented rate. Even during the Great Depression, it took three years for unemployment to jump from just under 10% to 25%. In 2020, it went from 3.5% to 15% overnight! Businesses teetered on the edge of extinction. Life as we knew it simply ceased to exist.


The damage spread far beyond the economy. The political environment turned toxic. Our debates were no longer about a difference of opinion about the role of government in our society. Instead, the other side turned into the embodiment of evil. Compassion, love, and empathy became scarce commodities. Long-term friendships and relationships with family members cracked and sometimes broke. Using the social media vernacular, we unfriended a lot of people. All of this as millions of people tried to cope with being sick, caring for someone with the disease, or grieving for a lost loved one. Nearly three-fourths of Americans know someone who has had COVID-19, and almost half know someone who has been hospitalized or died due to it. Loss is rampant throughout the country.

In Spite of Everything, The Stock Market Ended up for the Year

We wrote in detail about how this happened in our last quarterly report, so I won’t dwell on it here.  Suffice it to say, the markets are forward looking.  This means the market is expecting a very strong recovery in the months ahead.  It fully anticipates the government will create enough economic stimulus to bridge the gap between its current decimated state and its post-pandemic, functional state.

The pandemic will end, most likely some time in 2021.  Before then, we will have to get through the cold winter months with the virus spreading at an accelerated rate.  We’re coming up on the year anniversary of COVID-19 reaching our country.  It has been a very difficult year emotionally, professionally, and personally.  I don’t bring this up to unburden myself at your expense, but rather as an acknowledgement that we suffer in many of the same ways.  I hope all of you have found coping strategies that provide some measure of relief and that you enjoy the invaluable support of loved ones.  If you ever need to talk, even if it isn’t about your portfolio, I’m happy to take your call.

One of my coping strategies is to remind myself of all the good that still exists and happens every day.  Reflecting back on the year, there were plenty of positives to celebrate.  On the professional front, White Pine accelerated its technology deployment.  Stay-at-home orders forced us to work through the kinks of delivering our reports online, and Irene has greatly improved their visual presentation.  Hopefully, everyone now feels comfortable with how they are getting their information.  If not, please give us a call.  Technological changes can be difficult.  The last thing we want is to make reading your reports challenging.

Meetings Have Also Changed


Other than the few months in the summer during which we had the opportunity to meet with a few of you (wearing masks and appropriately spread out in our conference room), we have been forced to conduct our meetings in the virtual world.  While I still prefer face-to-face meetings, all of us have become much more comfortable with meeting online.  For those who live far from our Livonia office, this will be an ongoing option for you even after we return to our new normal.

We also used this challenging time to address more mundane tasks.  We hired a consultant to help ensure we meet or exceed all compliance standards.  As anyone who runs a small business knows, compliance with government regulations can be quite complicated.  The government sets the standards with the intention of protecting consumers, and as we wade through the paperwork, we keep that admirable goal in mind.  Amy is working with Schwab to offer electronic delivery of forms.  This will mostly help new clients, but I’m sure there will be other efficiencies we gain along the way.  The final company change worthy of mention here is that Will is now an owner of White Pine.  This exciting change came as a result of Will’s dedication to clients, his extensive knowledge of the industry, and his strong work ethic.

Personally, a lot has changed in the Past Year

Personally, a lot has changed in the past year.  Our college and grad-school aged children all returned home during the first lockdown.  We went from an empty nest to a full house.  While the taste of empty nesting was sweet, we felt grateful to have most of the kids safe and sound at home during the pandemic.  We’ll get back to empty-nesting soon enough.  Times of crisis do provide opportunities, and all four of our homebound kids made major strides in their schooling and careers, as did the two who live elsewhere.  I’m proud of the two who have continued to do well in their schooling in spite of switching to online learning as well as the four who are using their talents to serve others (one with children in foster care, another with young adults who’ve aged out of foster care, another as an AmeriCorps volunteer, and another as a nurse on her way to being a midwife).  Watching all the kids try to figure out what’s important in life and how to achieve it has been a satisfying part of parenting.

The most exciting news on our front is that our oldest decided it was time to make me a grandfather.  If all goes well, we’ll be vaccinated in time to snuggle our new grandbaby in June.  It’s a long road until then, with COVID fatigue, short days, cold temperatures, and isolation.  Each day feels the same.  I miss seeing my fun coworkers and wonderful clients in person.  I remind myself those interactions will happen again.  We can get through this.  We just need to take this one day at a time.  One day at a time.



Anthony J. DiGiovanni, CFA


Free Oil


Headlines from news sources across the financial industry rushed to proclaim “Oil Trading at Negative Prices” yesterday as the May contract for WTI (West Texas Intermediate) Crude Oil traded in negative territory.  How can oil, a commodity with versatile uses, trade at negative prices?  Would a company really pay to have its product taken away?  It’s complicated.

The oil market is large and only one small part of it went negative.  Oil commodities consist of the spot market (current market prices) and the futures market (prices for a future date).  Yesterday’s negative price was only in the futures market.  There are two main types of oil:  WTI and Brent Crude.  Only WTI went negative.  Finally, futures extend far into the future.  Only the May 2020 contract went negative.  Let’s take a closer look at why.

A futures contract is a legally binding contract between a buyer and a seller to transact at an agreed upon price on a set date.  A buyer who still owns a contract at the expiration date (which was yesterday for the May contract) is contractually obligated to buy the oil at the agreed price and take delivery of it.  A buyer who does not do so is in default of the contract; the seller of the oil can sue.

In the futures market, most traders unwind their positions (sell if previously bought and buy if previously sold) prior to expiration because most participants don’t have the ability to take physical possession of large numbers of barrels of oil. Usually though, there are some oil companies who can take delivery and will buy if the price gets too low.  That did not happen yesterday.  With few people flying or driving, oil reserves are full.  Nobody had the capacity to take the physical oil, so traders were forced to close out their positions at any price, even a negative price to avoid defaulting.  It’s kind of like having an estate sale when moving.  It would be better to get $100 for your dining room table, but if no buyer comes along, it still needs to go, and you might end up paying someone $50 to take it away.

How did this happen?  In a properly functioning market, oil prices should not be negative because oil has use not only as a fuel but also as a key ingredient for countless products.  There are two main types of crude prices: WTI and Brent Crude.  Brent represents more of a worldwide price of crude since it is produced near a seaport and can be easily distributed globally.  WTI is a landlocked crude, produced in the middle of America, and can only be delivered to Cushing, Oklahoma.  Buyers of WTI must take possession of it in Cushing and then either store it or have a way to immediately ship it.  This is where the breakdown occurred.

Financial markets are constantly rebalancing themselves and engaging in price discovery.  When prices get too high, people sell, and the increased selling brings the price back to equilibrium.  The same process happens in reverse when prices fall deeply below the economic value; buyers step in and bring the price back to its proper value.  But when WTI prices fell yesterday, buyers did not step in.  It seems like it would have been a perfect opportunity to make a significant amount of money by buying at negative prices and selling the next month at positive prices.  However, to restate the key points, futures contracts are legally binding and delivery must be taken in Cushing, Oklahoma.  If there is no available storage in the area, and no transport system in place, then nobody can buy.  If nobody is buying, the sellers become desperate even to such a degree that they are willing to pay others to take the contract off their hands.  That is what we saw yesterday in the May WTI Crude futures.

The other type of oil, Brent Crude, is still trading in the $20 range, and even WTI Crude futures for June is still $15 per barrel.  The price for future WTI one year out is in the $30 range (see chart below).  So, the negative price was an aberration in the current contract that expired with too many sellers and not enough storage capacity for the buyers.  We joked about buying some oil yesterday and storing it at our vacant White Pine offices.  Unfortunately, we couldn’t figure out how to transport the 1,000 barrels one futures contract represents up to our offices, and we’re not sure all the barrels would fit.


Last month, Russia and Saudi Arabia indicated there would be no slowdown in oil production, thus exacerbating the excess supply caused by the coronavirus pandemic halting the great majority of air travel, automobile use, cruise trips, and other economic activities that typically use oil.  As always happens with a large supply and a dearth of demand, prices dropped.  It is unlikely the world-wide Brent Crude price will go negative as there are still some places in the world to store the excess supply.  However, if demand doesn’t pick up soon, it is possible we will see a repeat of this issue when the June futures contract expires.


While the impact to the overall equity market is minimal, this event does provide some insight into the health of the global economy.  Oil prices and the economy often go hand in hand as oil is one of the main fuels used to generate energy.  The low prices indicate the severe lack of demand both in the US and the world.  This unusual phenomenon is a symptom of the severe disruptions we are all feeling in our daily lives.  The futures curve may indicate how long the market thinks this lack of demand will last and when the economy can begin to return to normal; the graph indicates the price of oil returns to a more typical $30 price by the end of the year.  We will continue to monitor this situation and how it affects our positions.  Meanwhile, we’ll work on reconfiguring our desks to accommodate 1,000 barrels of oil.

October 2016 Newsletter


One of the most frequently asked questions we get is: “How did Russ choose White Pine Investment Company for the name of the firm?”

Well, months before he started the company in 1997, he wanted a name that would represent good business values while being memorable for clients. That’s when his thoughts turned to the beautiful landscapes that had always fascinated him: from the rolling hills of the Southeast Michigan golf courses where he caddied during his youth to the gorgeous campus of Michigan State University that he walked every day as a student. Having completed the master gardener program through MSU, he realized that trees are the backbone of almost every landscape. So he decided to include a reference to one in the company name. But not just any tree. It would have to be a fast and steady grower. A tree that could withstand storms and disease. A tree with inherent stability to represent perseverance through the challenges of life. Finally, he reasoned that the name should reflect the beauty of the state in which most of his clients live (or have lived)–Michigan. So it was that he chose the beautiful Eastern white pine (pinus strobus) for the name, White Pine Investment Company.

This is just one of the many interesting facts you can learn about White Pine at our new website:  We felt that a refresh of the site was in order. We think you’ll find that it does a better job of capturing who we are and what we do. We realize it is quite possible you didn’t even know we had a website. In any event, now you can tell your friends, so they can learn everything they need to know about us. Perhaps you’ll learn something new as well.

One of the features of the new site that particularly excites us is our new client “login” section. We expect to have it completed and fully functional by the end of November. We will use the login section to post quarterly letters, your financial plans, and other financial material. You will also be able to upload documents there that you would like us to utilize when we work on your plan. Cybersecurity is very important to us. Sending an e-mail with sensitive information such as your financial data is not as secure as using the new login section of our website. Soon you will be able to create your own password enabling you easy access at any time to all financial documents stored there, and they will be protected by a 2048-bit SSL certificate with strong encryption and authentication. Again, watch for the new login feature coming in late November.

Finally, you’ll notice that we tweaked our logo, too.  We wanted to maintain the style that our clients have come to know over the past twenty years, while freshening it up for the 21st Century.  The tree has a more contemporary feel, and we added some color to the trunk. Also, notice that the new font has a more rustic character to go along with the graphic of a White Pine tree.

We invite you to take a look at the new website and give us your feedback. It gives us more flexibility to make edits and to add new material.  In fact, this quarter’s newsletter, providing a somewhat unique perspective on the presidential election, can be found on the news tab at the site.  Also, there are several forms in the “contact us” section that allow you, your family, and friends to communicate with us.  We even added some case studies to highlight ways we might be able to further assist you. If you think we should add anything else, please let us know.  We are always looking for ways to better serve you and all of our clients.



Anthony J. DiGiovanni, CFA

Chief Investment Officer

July 2016 Newsletter

In mid-summer of 1989, the NIKKEI 225 index was on a rapid ascent to its ultimate peak of 38,915.87 in December of that year. This was the climax of a 10-year period during which the value of the Japanese stock market increased six-fold.  News publications were filled with stories praising the work ethic and genius of this prosperous, exporting nation.  Japan was clearly the darling of the investment world and a country which was perceived as having unlimited potential.


During that period I was serving as branch manager of the Dean Witter office in Dearborn. One of my roles was to schedule representatives from various mutual funds to promote their offerings to our salesforce.  Each of the reps had a different style and a different angle to motivate their audience, but during this particular season they all had one exhortation in common: “Buy our Japan fund!”  One of the reps even came to our office dressed in a Kimono and treated the office to ice cream since sushi was hard to find at the time.  The most tempting incentive to buy his fund was an oversized sales commission which blinded the salesforce to its obvious risks. Most of you know the outcome of investing in Japan during the subsequent period.  Twenty-seven years later, investors who bought near its peak have yet to recoup even 50% of their original investment.

The point here is to highlight the core values which led to the formation of White Pine.  One of the glaring realities of the aforementioned story was the inherent conflict between large sales commissions and doing what was in the best interest of clients.  White Pine, on the other hand, is a Registered Investment Advisor (RIA) whose compensation is based on assets managed, not on a sales commission for a particular product.  Our management fees are reported quarterly and are the only source of revenue for our firm.  The typical broker/dealer structure allows most firms to charge an advisory fee, sales commissions, trailing fees, third party wrap fees, as well as sharing arrangements with other advisors. In such cases it is often difficult to calculate what a client is being charged and for what services.  Our management fee, however, is clearly reported to you every quarter.

Recently, the Department of Labor introduced the idea that all investment advisors, including brokers, be regulated as fiduciaries.  The simple definition of a fiduciary is a professional who puts a client’s interests ahead of their own.  This seems like common sense to us.  White Pine has been operating under these rules since our inception.  An example of this principle is that our personal equity portfolios hold the same security positions held by our clients, and we are charged the same fee structure that our clients are charged.  To illustrate this point in another way, our trading policy states that when a trade for our clients is only partially filled, all client orders have priority over employee orders.

The ultimate value that we strive to live by is our belief that each day is a God-given gift which should be used to serve others and to please Him.  Our desire is to help clients develop detailed financial plans which will meet their current and future goals.  We also do everything we can to help each person weather the inevitable storms that come with investing, which allows them to ultimately reach their financial goals. Developing the plan and keeping it current is important. .  Navigating the storm, and sticking to the plan is the real challenge.  Once we have experienced and overcome a difficult market together, we then have a mutual relationship that is likely to last for decades.

On My Succession.

One of the most frequently asked questions I hear is the following: “When are you going to retire?”  Since I am currently past the common retirement age when Social Security begins, it is a relevant inquiry.  However, a more important question to ask would be this: “How are you preparing White Pine for the future upon your succession?” Regarding the second one, the initial steps have already been taken.

Tony’s hire was critical to the portfolio management and financial plans that most of you have in place.  I can say with great confidence that Tony’s skills go well beyond investment expertise, and that you are in good hands with him at the helm.  And Michael Carmona, who joined us in the past year, has been a breath of fresh air. Not only is Michael polite and energetic, but he has a great appetite for learning and an eagerness to do whatever he can to help others.  His current track in completing the CFP (Certified Financial Planner) courses will enhance his ability to help many of you in future years.  As you know, our office manager, Debbie, is a talent whose capabilities go beyond what words can convey.  She executes daily administrative functions and interacts effectively with Schwab and with other professionals.  She is polite, efficient and loyal, and she cares a great deal about each one of you.  She is a vital part of our company, and finding her replacement one day will not be an easy task. In addition to our current staff, we expect to add others to our team.  The requirements we seek in the candidates we consider for hire are simple but in rare supply: love people, care about others, be excited about learning and act like an owner rather than an employee.

Oh, yes, back to the original question about the timing of my retirement. The simple answer is… not any time soon!  I love my job and the people I work with.  The plan is to continue as long as I am physically and mentally able…and as long as the job is fun.  A fact which might give credence to my expectations is that both of my parents worked well into their 80s before retiring.  However, the reality is clear to me that life can present unforeseen challenges that might not allow me to work forever. The bottom line is that I will stay on at White Pine for as long as I reasonably can, but expect to have the talent in place to serve you well when the time comes for me to hang it up.



J. Russell King