Guild’s Basic Needs Index
Professional Money Managers, Retail Traders, and Everybody In Between Needs a Plan
Having a strategy for each outcome is the key to getting through the confusion. In one environment, “Cash is king.” Yet, in a different (and quite possible) environment where the purchasing power of the currency is declining, cash provides the opposite of security. High growth at a high multiple has
Climate Change Debate Rages — The Investment Climate, That Is
A big debate is raging about the type of inflationary cycle the world is experiencing. How much higher? For how long? Have we peaked? Is the Fed right? Will the purchasing power of retirement savings collapse? In general, markets prefer clarity to uncertainty and confusion. Markets look for leadership, trends,
Market Summary — 17 June 2021
Post Fed Meeting Unwind of Many Crowded Inflation/Commodity Trades Yesterday, the Federal Reserve meeting concluded with a message that they are monitoring many of the rising costs and the inflation pressures in parts of the economy, and that there is a plan to reduce accommodative asset purchases and raise interest
How Inflation Can Crush Your Portfolio During a “Lost Decade” — Unless You Adapt
Last week, we noted that the typical 60/40 stock/bond portfolio allocation that has become an investing commonplace in the past several decades has historically produced many “lost decades” — periods of ten years or more that saw little to no advance in the portfolio’s real value. Source: GMO Capital Of
Market Summary — 10 June
The week saw interesting developments on the cryptography and cryptocurrency fronts. A massive international sting operation was revealed in which U.S. and Australian law enforcement had marketed compromised smartphones to sophisticated criminal users through an informant on the Dark Web, advertising them as cryptographically secure for communications. The allegedly secure
Hedging Inflation With Commodities: What Decades of Experience Have Taught Us
The current investment environment suggests one critical lesson to us: the future into which we are moving is going to be very different from the immediate past. Therefore, investment strategies which have become standard-issue conventional wisdom over the past few decades are going to fail. Investors will have to reach
Market Summary — 3 June 2021
As we noted in our main piece this week, we believe it’s very important for investors to revisit their commodity allocation now, while rising inflation is still in early innings. We’re cautious on some commodities that have run recently, such as copper and iron ore, and while we still like
Taiwan: Critically Important Flash Point
One lasting effect of the pandemic’s disruption of global supply chains has been a shortage of chips. This is not primarily a shortage of the advanced semiconductors which some industry leaders have increasingly favored because of their higher margins; rather, it’s the commoditized, workhorse chips that are now essential components
Market Summary — 27 May 2021
Various Fed officials, including Vice Chair Richard Clarida, have taken to the airwaves to talk down inflation concerns and show confidence in the Fed’s ability to engineer a “soft landing” when the time comes to curtail pandemic-era policy. This has given markets a tone of uneasy quiet. Economist Mohamed El-Arian
All Eyes on Wage Inflation
At this point in the post-pandemic recovery, a lot depends on who is right in the very lively “transitory vs. persistent” inflation debate. For investors, the question is particularly sharp. If you believe that Fed Chair Powell and Team Transitory are correct, you will position your portfolio quite differently than
Market Summary — 5 May 2021
The correction we have been expecting for some time is now underway. Inflation Breakout: Demand Pull Moving To Cost Push Inflation has broken out and gold has broken out to a two- or three-month high. We suggest that investors use dips to buy gold, silver, copper, and other industrial metals
Inflation, Interest Rates, & Gold, Oh My!
April inflation data came in hot, as we’ve been predicting for months. By bringing you our Guild Basic Needs Index, we have been preparing you for some of the eye-popping numbers you will see. Year-over-year, lapping last year’s first full month of pandemic lockdowns, prices rose 4.2%. But month-over-month, overall
March Data Show Inflation Is Still Climbing
A month ago, as inflation talk claimed more investor attention, we revived our in-house inflation index — the Guild Basic Needs Index — which was designed as a simple and straightforward snapshot of the on-the-ground inflation picture faced by consumers, not gamed or massaged by statistical sleight of hand. (If
Earnings Growth: Is This As Good As It Gets?
Earnings season is a busy time at Guild, since our management style emphasizes the careful selection of individual stocks rather than broad indices. That means that we typically have two or three dozen company conference calls to listen to; we find that significant details are often neglected in the summary
Market Summary — 6 April 2021
Rising inflation expectations may be even more important for investors than rising inflation. These expectations are forcing individual investors and money managers to include a new factor in their models and strategies that has been absent for the better part of two generations. Notably, expectations are essentially aspects of human
Commodity Price Drivers: The Rational, the Irrational, and the Unpredictable
Many commodities have boomed, driven by a confluence of forces: ongoing monetary and fiscal stimulus; accelerating post-pandemic global economic growth; long-term underinvestment in commodity production capacity; pandemic-related supply chain and shipping disruptions; the rise of sustainability metrics for public companies; the push for decarbonization and the electrification of the global
