These equity investments are primarily highly liquid stocks of large- and mega-cap companies poised to benefit within the dynamics of the larger macro environment. Liquidity is also a key consideration for any derivatives in which we invest.

Risk Management Highlight

In January 2020, we saw a large disruption in our east-Asian supply chains impacting 4–10-month lead time inventories. Suppliers informed us Chinese cities were closing, and the Chinese New Year holiday was extended to keep Chinese citizens at home to prevent the spread of the highly contagious COVID-19 virus. Coupled with our recognition of the market’s poise for a correction due to the melt up in November and December, we recognized the risk for US equity markets and the U.S. consumer economy pending the spread of the disease on US soil.

Weighing these factors, CEA decided to raise cash to 90 in February, and participated in only half of the downside of the S&P 500 during the month of March.