From the Founder: Reflections on 40 Years

Dear Clients, Associates, and Friends,

Crawford Investment Counsel was founded on September 30, 1980. This is a long enough time to occasion celebration, recognition, and reflection. It is an important time for our firm, and were it not for the pandemic and the restrictions it places us under, we would be doing some real celebrating. That will have to wait for better and healthier days, but for now, we can reflect on our history and spend some time processing our experience as a way of reinforcing good practices and recommitting ourselves to our founding principles.

As the founder of the firm, I have spent the last few weeks remembering those early days: the excitement of a new challenge, the anxiety that came with not knowing if the firm would make it, let alone be successful, and getting used to working alone, something new to me. There was hope for the future and fear of failure. Fortunately, things have worked out better than I could have ever hoped. From a humble beginning of one employee (me), four clients on opening day, and assets under management of $17 million, we have grown consistently through the years to our current state of 53 employees and $6.7 billion assets under management as of September 30, 2020.

Over the years I have been asked why I started the firm. My answer has always been that I wanted to create my own environment. I wanted to establish and work within the confines of a firm that embodied my vision of what could be a successful way of managing assets and working with clients. So it was then that I established two operating principles upon which the firm was founded: invest conservatively in high-quality securities, and combine that with a commitment to a high level of personal and individualized service to our clients. I am happy to say that these two operating principles are still the driving force in our company.

As I reflect on these forty years there is much that I wish to say. I cannot say it all, but permit me, if you will, the luxury of sharing thoughts that I believe are important as they relate to the past and the future. These thoughts express appreciation for some of the things that have helped us become successful, and which will continue to inform us as we go forward.

THANK YOU. This section is about saying thank you to all of those who have helped me and the firm along the way. It would have been impossible to make it without your help. I single out, for special appreciation, two groups: our clients and my associates at the firm. We are very fortunate to be able to work with a loyal, interesting, diverse, and pleasant group of clients. Of course, without them we are nothing. We never forget that, and we express to them our deepest appreciation for the opportunity to work with them in the management of their assets. And, a special thanks to those clients who have referred others to us. We take referrals as high compliments, and we greatly appreciate them.

To my associates, all of the employees at our firm, I commend them for their dedication to our founding principles, for their integrity, hard work and generous spirit, and for all their efforts in helping us to get to this point in our history. I take great pride in our people, and it is a pleasure to work with them on a daily basis.

OUR MISSION. We believe it is of utmost importance for our firm to be guided by a statement of purpose, to clearly state who we are, what we believe in, and what we are trying to achieve. Our mission statement is simple and straightforward. It requires no elaboration, but we share it with you as the defining statement of what we are about as a firm. It has informed us in the past, and it will continue to do so in the future.

Our Mission is:

  • To earn superior returns for our clients
  • To always act in the best interest of our clients
  • To be guided by honesty and integrity, and to hold ourselves to the highest ethical standards
  • To anticipate and satisfy the needs of each client in a manner that expresses our appreciation for them as clients
  • To promote within our firm a culture of equity, fairness, collegiality, respect, and teamwork
  • To provide our employees with the opportunity for personal and professional growth
  • To maintain a level of profitability that enables us to achieve our mission

INVESTMENT PHILOSOPHY. A philosophy of life is a way of living. It means being faithful to a set of fundamental principles around which one acts out their life. Likewise, an investment philosophy is a way of investing, being faithful to a set of fundamental investment principles which inform and define investment choices. Many have heard me say over the years that having and believing in an investment philosophy is the most important characteristic that a potential client can identify in a firm. It is absolutely essential, in our opinion, that to be successful, an investment firm must be guided by a well-defined investment philosophy. Let there be no mistake; we have a well-defined and clearly stated investment philosophy, and we believe in it deeply. It has been our philosophy since the inception of the firm, it is our philosophy today, and it will continue to be in the future. We believe our philosophy reflects classic investment theory; it has been subjected to academic rigor; it has been tried and tested over long periods of time; it embodies common sense, and it works. It is an anchor that keeps us from drifting in turbulent times, and protects us from the vagaries of investment styles and moods.

I am sure that all readers of this letter are familiar with the details of our philosophy. Simply stated, it begins and ends with quality, whether it be stocks or bonds. For bonds, quality is about safety; for stocks, it is about greater predictability. And, of course, in stocks our philosophy is grounded in the dividend. For any who would like an in-depth description of our philosophy, please visit our website where there are numerous articles on the subject.

ALWAYS IMPROVING. While we feel very good about the state of our firm, we recognize that there is always room for improvement. As we have grown over the years we have made a constant effort to bolster our capabilities in all areas of the firm. We have built out each department by identifying and hiring competent and motivated individuals, and we have increased our technological capabilities by investing in improved infrastructure. All of these measures contribute to a successful delivery of service to our clients. On the investment side, our equity research department has been a focus of resource allocation within the firm for a number of years. We now have eight dedicated, senior investment analysts under the leadership of John Crawford, IV. It should be noted that this group is devoted solely to equity research. They have no other responsibilities, and they function very well as a team, within the confines of our overall investment philosophy. We have also built out a fully developed bond management team. Under the leadership of Jon Morgan this group is responsible for the selection of bond positions and the management of fixed income portfolios. We appreciate their fine work on behalf of our clients. Ours is primarily a people-business, and we pledge to continue to invest in the best people we can find, as well as the firm’s infrastructure.

THE FUTURE. It is very difficult for enterprises to stand still. They are either moving forward or going backward. We are committed to continuing to grow. This is important to our clients, for as we grow, it enables us to grow our capabilities, enhance what we do, and get better. We will continue to reinvest back into the firm. Growth of our firm is also important to our associates since our corporate growth provides them with the opportunity for personal and professional growth. As the firm grows, they grow. We feel all of this can be accomplished through effective implementation of our investment processes and customer services that are designed to produce a self-reinforcing cycle of prosperity. That is, clients meet their investment objectives and remain long-term investors with the firm which ultimately enables us to achieve and enjoy success as well.

Ours is an independent firm, and as we view the future, we reaffirm our intention to remain independent. Through the years we have had many inquiries about merging or selling the firm to another organizations. We have chosen not to engage in these conversations, for we value our independence, and we believe that it has been one of the more important elements in our success. Independence enables us to be beholden to no one other than our clients and their best interests.

Another future-related development is the fact that over time, our firm has been undergoing a management transition. We highlight this, for all too often periods of transition lead to dysfunction in a firm, and I am happy to report that we have successfully made the transition to a new generation of leadership. David Crawford has now served as president of the firm for over ten years. We have other senior people in leadership positions as well, and while I expect to remain active in the firm, our future is no longer overly dependent on me. Stability has been one of the sustaining factors in our history, and we note our successful transition, for it suggests a stable future, something of importance to both clients and associates.

CONCLUSION. This letter may prompt questions or comments. Client interaction has always been one of the highlights for me, so I would be pleased to hear from you. For now, thank you for letting me review some of our past and what I believe will be important in the years ahead. We believe that our firm has a bright future. As stated earlier, I am very proud of our firm and what it stands for. We intend to stay loyal to our founding principles, and we will continue to value our clients and their best interests above all else. We will strive each day to get better at what we do. To all of our clients, associates, and friends, I again say thank you for helping us achieve this important milestone of 40 years.

Best regards.