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Dear Shareholder:
In early autumn, 1941, Dupree & Company, Inc. had its beginnings in the small town of Harlan, Kentucky. My father, who came there from having managed a large region of the U.S. for Blyth & Co. in Cleveland, Ohio, expected to be there only a few years, long enough to get a coal mine in better financial shape, and then his plans were to return to Blyth. The coal mine never got in good enough shape to do that.
I was eleven years old then. Ironically, that was the year of Pearl Harbor. Like all of us, when trauma occurs, I remember exactly where I was when the news reached us. I was out in our front yard, playing, and my father came to the door to call me in. "Son", he said, "listen to this. You are hearing a moment in history you must not forget." And so, we gathered around that old Philco radio, shocked at what we heard. "Would life ever be the same?" No, it wouldn't.
Now, sixty years later, another "Pearl Harbor" has occurred. Another stealth attack has been launched by a perpetrator who must believe America either cannot or will not react, as, indeed, the Japanese military establishment must have believed. Like them, these perpetrators are in for a big surprise.
One of the more interesting things about those World War II days is that folks who lived through them look back now and see that they were times in which we were all intensely alive. Funny about that; life is most lived when our faith in our well being is most tested. Yet none of us would choose that test.
In those sixty years there have been other tests too. I will never forget Fed Chairman Paul Volkler's "Saturday night massacre" of the bond market in late 1979, an event that lasted into at least 1981 and, really, well beyond. I had started the Kentucky Tax-Free Income Fund in the summer of 1979, a brilliant piece of bad timing, and came close to going broke as a result. But, again, we survived, and my wife and I remember that time as frightening, yes, but also an intensely vital time in which we were "really alive".
Indeed, our economy has seen some rough bumps in those sixty years. The oil shock of 1973, the 1987 stock market crash and, of course, the Gulf Conflict of 1990-91. All of that was followed by the enormous stock market rise of the late 1990's! This is a resilient country.
We are resilient because, relative to other countries, we are free and, with a few flaws, are generally dedicated to the proposition that everybody gets an equal shot at succeeding. What we do with this freedom is not always pretty to those who see us from entirely different cultures, but ironically, they all want what they see. So mixed with the so called "spiritual" aspect of this attack is a hatred born out of envy. The President is right when he says this has been an attack on freedom. Will this evil prevail? That is up to us.
Abraham Lincoln talked about freedom at Gettysburg, and wondered aloud whether a nation "so conceived and so dedicated" could "long endure". Well, Mr. Lincoln, I think the answer to your question is "yes, we will endure". My life experience says you can count on it. But, quoting Lincoln further, we must highly resolve that the dead in New York, Washington and Pennsylvania "shall not have died in vain – that this nation, under God, shall have a new birth of freedom – and that government of the people, by the people, for the people, shall not perish from the earth".
To quote another President, "all we have to fear is fear itself". (FDR on the Depression) In the next few months our "fear of fear" will be tested economically. But meanwhile, my tennis partner, Foster Pettit observes that this is probably the safest time to fly commercial air we have seen in a long time.
Shares registered in an adult child's name, can't be taken back: If the child is a minor you can only register shares in the name of an adult guardian for the child. A minor child cannot legally own shares.
If you register shares in the name of someone else, your adult child included, those shares have legally become the property of that person. You are not even entitled to know what is in the account, and we are prevented by law from giving you that information. And, only the owner can give us instructions to redeem or transfer shares. I can understand the frustration of a parent who gives shares to a grown child with the understanding that they will add to the account, and who later suspects they have not kept their part of the bargain. But to reverse this you will need to have registered the shares jointly.
Newspaper headlines: "Rating Agencies slash Tennessee bond ratings" said one newspaper recently. Actually, the rating agencies reduced Tennessee State General Obligation bonds from AA1 to AA2, an almost unnoticeable change, which will have little or no effect on the market for these bonds.
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