The Crowdstrike Outage - Prospero Wealth

Friday was interesting, right?

Many of you are concerned about the computer outage that affected everything from travel to doctor’s offices to bank and investment accounts.

It was a bit of a relief when cybersecurity firm CrowdStrike’s CEO George Kurtz reassured us early in the day by saying, “this is not a security incident or cyber attack. The issue has been identified, isolated and a fix has been deployed.”

Still, it’s upsetting to log into accounts and see a warning message. Here’s what Charles Schwab had on its customer portal for most of the day.

“Due to a third-party, global and industry-wide issue, certain functionality may be intermittently slow or unavailable. We’re monitoring the issue. Phone services may be disrupted and hold times may be longer than usual.”

CNBC.com, July 19, 2024. “Microsoft-CrowdStike issue causes ‘largest IT outage in history.’”

What should be done?

For some of our clients, CrowdStrike was a top performer in one of our active investment sleeves (Caliban). After a quick consult with Suhas on Friday, we sold out of our entire position, as we assessed the mid-term reputational and business risks to be substantially beyond the initial negative response. For long-term Caliban investors, we were able to preserve a pretty large gain responding quickly. The trading activity on CrowdStrike today seems to have validated that approach, dropping by a further 13%.

Beyond that action, however , there’s not too much that can be done, or even should be done in an event like this—especially when you do not have direct exposure to the key players in a market-shaking event. For the vast majority of these issues, a coll head and patience prevail.

For most of you, the best you can do is use this as a reminder to stay proactive with personal security, like updating passwords. Also, that certain accounts have limitations regarding financial protections.

Remember, with bank accounts, FDIC provides depositors with an insurance payout of up to $250,000 per depositor, institution, or ownership category. If you have more than $250,000 at a bank, we might want to take a look.

(As you may recall, when Silicon Valley Bank and Signature Bank had issues in March 2023, there were concerns about the treatment of depositors. Fortunately, the FDIC stepped in quickly and guaranteed all deposits, even the uninsured money. )

Please let me know if you're struggling to get updated information on any of your financial accounts. While we are seeing things at Schwab back to normal, it may be several days before all services are back to normal.

Friday was interesting, right?

Many of you are concerned about the computer outage that affected everything from travel to doctor’s offices to bank and investment accounts.

It was a bit of a relief when cybersecurity firm CrowdStrike’s CEO George Kurtz reassured us early in the day by saying, “this is not a security incident or cyber attack. The issue has been identified, isolated and a fix has been deployed.”

Still, it’s upsetting to log into accounts and see a warning message. Here’s what Charles Schwab had on its customer portal for most of the day.

“Due to a third-party, global and industry-wide issue, certain functionality may be intermittently slow or unavailable. We’re monitoring the issue. Phone services may be disrupted and hold times may be longer than usual.”

CNBC.com, July 19, 2024. “Microsoft-CrowdStike issue causes ‘largest IT outage in history.’”

What should be done?

For some of our clients, CrowdStrike was a top performer in one of our active investment sleeves (Caliban). After a quick consult with Suhas on Friday, we sold out of our entire position, as we assessed the mid-term reputational and business risks to be substantially beyond the initial negative response. For long-term Caliban investors, we were able to preserve a pretty large gain responding quickly. The trading activity on CrowdStrike today seems to have validated that approach, dropping by a further 13%.

Beyond that action, however , there’s not too much that can be done, or even should be done in an event like this—especially when you do not have direct exposure to the key players in a market-shaking event. For the vast majority of these issues, a coll head and patience prevail.

For most of you, the best you can do is use this as a reminder to stay proactive with personal security, like updating passwords. Also, that certain accounts have limitations regarding financial protections.

Remember, with bank accounts, FDIC provides depositors with an insurance payout of up to $250,000 per depositor, institution, or ownership category. If you have more than $250,000 at a bank, we might want to take a look.

(As you may recall, when Silicon Valley Bank and Signature Bank had issues in March 2023, there were concerns about the treatment of depositors. Fortunately, the FDIC stepped in quickly and guaranteed all deposits, even the uninsured money. )

Please let me know if you're struggling to get updated information on any of your financial accounts. While we are seeing things at Schwab back to normal, it may be several days before all services are back to normal.

Friday was interesting, right?

Many of you are concerned about the computer outage that affected everything from travel to doctor’s offices to bank and investment accounts.

It was a bit of a relief when cybersecurity firm CrowdStrike’s CEO George Kurtz reassured us early in the day by saying, “this is not a security incident or cyber attack. The issue has been identified, isolated and a fix has been deployed.”

Still, it’s upsetting to log into accounts and see a warning message. Here’s what Charles Schwab had on its customer portal for most of the day.

“Due to a third-party, global and industry-wide issue, certain functionality may be intermittently slow or unavailable. We’re monitoring the issue. Phone services may be disrupted and hold times may be longer than usual.”

CNBC.com, July 19, 2024. “Microsoft-CrowdStike issue causes ‘largest IT outage in history.’”

What should be done?

For some of our clients, CrowdStrike was a top performer in one of our active investment sleeves (Caliban). After a quick consult with Suhas on Friday, we sold out of our entire position, as we assessed the mid-term reputational and business risks to be substantially beyond the initial negative response. For long-term Caliban investors, we were able to preserve a pretty large gain responding quickly. The trading activity on CrowdStrike today seems to have validated that approach, dropping by a further 13%.

Beyond that action, however , there’s not too much that can be done, or even should be done in an event like this—especially when you do not have direct exposure to the key players in a market-shaking event. For the vast majority of these issues, a coll head and patience prevail.

For most of you, the best you can do is use this as a reminder to stay proactive with personal security, like updating passwords. Also, that certain accounts have limitations regarding financial protections.

Remember, with bank accounts, FDIC provides depositors with an insurance payout of up to $250,000 per depositor, institution, or ownership category. If you have more than $250,000 at a bank, we might want to take a look.

(As you may recall, when Silicon Valley Bank and Signature Bank had issues in March 2023, there were concerns about the treatment of depositors. Fortunately, the FDIC stepped in quickly and guaranteed all deposits, even the uninsured money. )

Please let me know if you're struggling to get updated information on any of your financial accounts. While we are seeing things at Schwab back to normal, it may be several days before all services are back to normal.