We do not regard current market action as favorable; it is likely the harbinger of a possible near-term correction. As we indicated in our last letter, we believe that 2022 will be a year marked by volatility; the inflation landscape, the Fed’s evolving response, and potential political turmoil surrounding mid-term Read more
As we come closer to year end, U.S. markets remain, as of this writing, within a percentage point or two of their all-time highs. We have come a long way since the first reports of a new SARS-like virus began to percolate into public awareness in January 2020. The world Read more
We started banging the drum on inflation early this year; over the course of the year, more analysts and observers began to join us in identifying the rising risk of more troublesome and persistent inflation. By late summer, the consensus had firmly shifted to the “persistent” camp, but the Federal Read more
We are not bullish on high-P/E ratio stocks. At this stage of the market, we expect more volatility, and we move away from companies which will not earn money during the period of rising interest rates that we expect for the next several years. Currently, having a large concentration of Read more
We’ve commented a few times in recent letters on one of the pandemic’s most noteworthy effects: what’s come to be known as “the Great Resignation.” It’s visible economy-wide, as it includes both early retirements and reassessment of family lifestyles — care for children and elderly relatives. It is making geographic Read more
As we move into the final weeks of the year, some typical seasonal dynamics are likely to begin coming into play. After a tumultuous year, tax-loss harvesting may cause significant volatility. Some names that have performed very poorly over the year may come in for additional volatile selling, and the Read more
We noted last week that we’d provide you with October data on our in-house real-world inflation measure, the Guild Basic Needs Index (GBNI). Here it is: up 30.7% year-on-year. (The GBNI is constructed to reflect the price of essential living expenditures, without statistical manipulation or adjustment. For more details about Read more
Statistics argue that a year as strong as this one has been will finish strongly. The crop of 2022 projections is beginning to arrive, with some holding forth for a muted or negative performance by the broad market, and others more optimistic, in the face of what will likely be Read more
Another week brings another set of inflation-related data to report on. In the past few days, we have seen consumer (CPI) and producer (PPI) inflation data from the U.S., Europe, and China. (When our October data are complete next week, we’ll give you an update on our in-house real-world inflation Read more
If only everything were linear and two-dimensional, the investor’s task would be a lot simpler. The inflation, margin, and productivity trends noted above would be easier to translate into predictions. Unfortunately there are confounding factors which make the problem multidimensional, non-linear, and much more unpredictable. Among the most significant of Read more
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