OCTOBER 2001

Avon Calls: Mission Adds First Fortune 500 Company

The company for women is doing Bermúdez received Avon’s 14th business with a woman-owned Annual Women of Enterprise award in company. New York. She was one of four women around the nation selected for In an agreement announced recently, the distinction. Mission Management & Trust Co. will provide investment advisory “In choosing recipients for the Women services for a substantial fixed- of Enterprise award, we looked for income portfolio held by the Avon people who had a difficult time and Foundation, part of Avon Products, still persevered and got to the Inc. pinnacle. Now, Ms. Bermúdez has “You could say a woman of applied that same drive and energy to enterprise has become an become a business partner to Avon,” enterprising woman supplier.” said Fitzroy J. Hilaire, Director of Supplier Development, Avon Products, Inc. Avon—whose marketing slogan includes the phrase “the company for “You could say a woman of enterprise women”— is Mission’s first Fortune has become an enterprising woman 500 client. Carmen Bermúdez (left) supplier,” he added. with Avon CEO Andrea Jung at the 2000 The announcement comes slightly Avon is the global leader in sales of more than a year after Mission Avon Women of Enterprise award ceremony beauty and related products, with Chairman and CEO Carmen (Cont’d on pg. 2) : A Partnership Endures Just as New York’s World Trade portfolios the ability to earn a An opportunity for collaboration Center stood for American business greater return. occurred about two years ago, when and enterprise, Cantor Fitzgerald & Mission learned that a large public fund Co. represents companies’ resolve Mission selected Cantor Fitzgerald had put out an RFP for a $6 billion and resilience in the aftermath of as its partner in this endeavor securities lending portfolio. Two the Sept. 11 tragedy. because of “its willingness to be Cantor Fitzgerald executives traveled to flexible and its emphasis on quality Tucson and helped craft the proposal. The company, which lost nearly 700 of service, along with getting outside employees who worked in the One the box and doing things for clients Although Mission did not win that World Trade Center tower, also has others would not do,” said Mission’s business, “it gave us the chance to special resonance for Mission Vice President Susan Ernsky. work through the relationship,” said Management & Trust Co. Ernsky. “So the level of trust we have “This was the first sizeable company with them is very, very high.” ! As Mission’s securities lending that looked at Mission and said, ‘we partner, Cantor Fitzgerald provides like what we see, and we’ll be there Mission Remembers clients with substantial securities beside you,’ ’’ she added. Bill Meehan... see page 3 The MissioN Bell

Value or Illusion? by Thomas J. Feeney, Chief Investment Officer

People who became investors market participants today have that face a period of stagnation marked, at during the greatest bull market in historical background. best, by minimal portfolio returns U.S. history are experiencing their over that period. first taste of a bear market. Almost It is no wonder that most investment all have seen their portfolios decline plan sponsors are terribly confused. What’s an investor to do? over the past year and a half, yet They are bombarded daily by TV’s most retain a remarkable level of talking heads who constantly Without attempting to “time the confidence that this is merely a speculate on how close we are to the market,” where Mission has asset temporary decline, inevitably to be bottom of this decline. Almost all of allocation latitude, we employ greater followed by a return to consistent these “experts” have vested interests than normal common stock positions growth. After all, the Federal in a bullish market environment. when the market is selling at less than Reserve has committed its efforts to Very few examine the market with a its historic valuation norms, and we staving off a recession and, in turn, dispassionate eye. Fewer still have cut back our equity holdings in to stabilizing the securities markets. any practical experience in a bear degrees as the market’s valuation After the near canonization of market of historically normal length. levels move progressively higher. Chairman Alan Greenspan, few That strategy left us earning less for doubt the Fed’s ability to keep The lesson of history is a far more our clients at the end of the 1990’s portfolios from permanent harm. valuable guide to the years ahead than than many more venturesome the glib opinions of today’s “experts.” managers were earning. Conversely, We view such complacency with And history argues strongly that our clients’ portfolios have continued considerable alarm. While the Fed’s common stocks in the aggregate are to grow nicely in 2000 and through efforts have been successful far more still at precarious levels. this year. The bottom line: our clients often than not, there have been a few have done far better than most over noteworthy exceptions. Investors No less a guru than Warren Buffett, the longer three- and five- year time must recognize that never before has the single most successful investor in periods. Following that approach on the Fed conducted its stimulative history, supports that view. In a TV a formularized basis over the past 75 activities in such an overvalued interview about two years ago he years would have led to significantly stock market environment as we voiced his regret at holding billions of greater success than following a fixed have now. Other than in the late dollars of cash, yet stated a clear allocation approach. 1990’s, when the price-to-earnings preference for that to doing multiple on the Standard & Poor’s “something foolish,” like buying We look forward to the opportunity to 500 rose to more than 30, overvalued common stock. He has become aggressive stock buyers once throughout history the S&P 500 repeated some version of that belief again. We have the patience, rarely reached as high as a 20 several times since. however, to wait for stocks to return multiple. At three prior extremes, it to attractive valuation levels. stretched as high as 25, but in each Rallies, even substantial ones, can Likewise, your investment program instance major stock market declines occur at any time. But the lesson of will maximize its potential in the ensued. history is clear. From levels of both decade ahead if it follows the lessons overvaluation and undervaluation, of market history. ! Never, before the 1990’s, have common stock price-to-earnings investors been rewarded for being multiples have always, without bullish toward stocks at PE multiples exception, ultimately reverted to their (Avon Calls...cont’d from pg. 1) above 20. Today’s multiples in the historic means in the range of 14 to high 20’s are lower only by 15. If that occurs quickly from current annual revenues of $5.7 billion. Its comparison with the 30-something levels, there will be great pain and products are sold in 139 countries multiples of the prior several years; considerable losses in equity-oriented through 3.4 million independent sales but investors with a sense of history securities portfolios. If reversion to representatives. The company had a know that these levels are more the mean takes place over a five- to record second quarter, in which sales ! characteristic of major market tops, 10-year span, characterized by mini- rose five percent to $1.45 billion. not bottoms. Unfortunately, few bull and mini-bear markets, we will

2 The MissioN Bell

Granaas Joins assist in business development in the Prior to joining Compass , national market, according to Carmen Lee worked at Bank of America’s Mission Bermúdez, Mission’s Chairman and Private Bank in Tucson for nine CEO. years. There her responsibilities included managing an Lee comes to Mission after a two-year administrative office and stint as manager of Compass Bank’s supporting business development. Private Client Services Group in Tucson. Asked why she moved to Mission, she quickly replied, “It’s a trust, not a bank. That’s why I am here. I “I want to get back to what my want to get back to what my philosophy is-- taking care of the philosophy is—taking care of the clients.” client. Big have lost their focus there entirely. I hope as each day evolves I can bring something Lee Granaas has joined Mission In that position, “we focused on to the table.” Management & Trust Co. as a Vice customers with a net worth of $1 President. She has nearly three million or more, or $500,000 in Lee currently is President of the decades of experience in financial investible assets. Southern Arizona Estate Planning management and administration, with Council; she also is a member of special expertise in personal trust, The goal was to take that sort of the University of Arizona Planned conservatorship and probate accounts. customer out of the mainstream of Giving Advisory Council and the banking with high-touch, hands-on Foundation Board of Trustees for At Mission, she will work closely services,” she explained. Casa de los Niños in Tucson. ! with personal trust administrators and Remembering Mission Supports Cantor Fitzgerald Bill Meehan Relief Fund

At our April 2000 investment Mission has joined countless conference, Mission clients listened to individuals and entities in a fine, foresighted presentation, supporting the Cantor Fitzgerald “Exuberance – Rational or Relief Fund. Otherwise?” by William J. Meehan, Senior Vice President and Chief Fund donations are earmarked for Market Analyst at Cantor Fitzgerald emergency, short-term financial & Co. assistance, emotional and mental health support services and At our publication deadline, Bill was ongoing assistance for child care, still among those unaccounted for at long-term health care and college the disaster site. tuition.

Besides enjoying him personally, we To make a donation, call at Mission greatly appreciated and 1-800-446-0500 or send a check admired Bill’s willingness to voice his to: So many people in the investment well-researched opinions— even management business knew men and when they differed from the bullish The Cantor Fitzgerald Relief women who were trapped in the Wall Street consensus. Fund collapsed twin towers at New York’s 101 —45th FL World Trade Center. We at Mission He was among the few, for example, New York, NY 10178-0060 are among those pausing to remember who identified the late-1990’s stock Attention: Dr. Philip Ginsberg/ them. market bubble before it burst. ! Edie Lutnick !

3 The MissioN Bell

™ The Mission Bell On the Internet, the Leave a Legacy Leave a Legacy is published quarterly Arizona ™ Web site is: exclusively for our clients and Launches in www.LeaveALegacyArizona.org. friends by Arizona Mission Management & Trust The National Committee on Planned Co. Giving Web site is: http://www.ncpg.org. Leave a Legacy™ Arizona is a ! We encourage and welcome the input newly formed state initiative to raise and comments of our readers. Please awareness of planned charitable gift direct correspondence, reprint and bequest opportunities benefiting requests, change of address individuals, families and notifications, etc., to The Editor at: communities. Mission Management & Trust Co. In Future Issues La Paloma Corporate Center The program is an offshoot of an 3567 E. Sunrise Drive, Suite 235 international effort in the United Tucson, AZ 85718 Martha Seger Discusses Women in (520) 577-5559 States and Canada coordinated by the Business and on Boards National Committee on Planned fax (520) 577-6781 Giving. 1-800-547-1174 e-mail: New Rules for Retirement Accounts [email protected] Wil Runcorn, Vice President and Website: www.missiontrust.com Director of Client Services at Mission Carmen Bermúdez Speaks About All materials presented are compiled from Management & Trust Co., helped sources believed to be reliable, but accuracy CEO Success Strategies organize this new program, which is not guaranteed. Reproductions of this began operation in July. publication in whole or part are prohibited

except by permission.

PERMIT #925 PERMIT

TUCSON, AZ TUCSON,

US POSTAGE PAID POSTAGE US PRST STD. PRST

4