Guild’s Basic Needs Index
Governments Aren’t the Only Ones With Money To Spend
The remarkable market rally since last year’s pandemic lows can be attributed in large part to the very large and rapid increase in real liquidity in the financial system — that is, “readily available money above and beyond what is needed for economic growth,” as Canaccord Genuity strategist Tony Dwyer
Capex and Robots
We mentioned above the robotics companies could be key beneficiaries of accelerated capex spending made by U.S. corporates flush with cash from bond and equity raises last year. A Bain Capital reports notes that between now and 2030, American companies are expected to invest some $10 trillion into automation. The
Market Summary — 21 January 2021
Yesterday passed and saw the arrival of another new U.S. presidential administration and a new Congressional majority. Our attention remains focused on the two trends mentioned above: the beneficiaries of the new administration’s policy priorities, and the technology trends which, beyond the troubled limelight of big tech, are riding the
Rethinking Investment Portfolios In Light Of the Coming Inflation
Of the critical macro variables for investors to watch, inflation is one of the most important. Current inflation, as well as prospective changes in inflation levels and direction can result in very different outlooks for asset classes, sectors and industries, and entire economies. In the post-2008 era, broad inflation has
Market Summary — 14 January 2021
If inflation is coming, as we described above, those investors who remember the inflation of the 1970s should know that it will not necessarily look like it did back then. The economy is radically different in sectoral composition and weighting; industries are radically different technologically; people’s appetites and needs for
We Believe That This Is the Beginning of a Sea Change In Inflation — And Here’s What You Should Do
Back in late August, the Federal Reserve announced a new policy framework. It pledged to target an average inflation rate of 2%, letting it run above 2% for potentially prolonged periods; and it said that it would not respond to an improving employment picture with pre-emptive rate increases. Around the
Opportunity in Hong Kong, Trouble For Chinese Tech
Hong Kong had a rough 2020, hit by the pandemic, by escalating tensions between the U.S. and the People’s Republic of China, and by ongoing resistance in Hong Kong to the effective early end of the “one country, two systems” policy that had once seen the PRC largely leave Hong
Market Summary — 7 Jan 2021
As we write, the results of Georgia’s elections are down to the wire, but it looks likely that the Democratic Party will capture both of the state’s U.S. Senate seats. That would give us a 50/50 split in the Senate, with Vice President Kamala Harris as the tiebreaker — in
Wallet Wars
Back in 2017, we wrote about the incredibly rapid pace of growth in Chinese e-commerce and financial technology. To say the least, there’s been some water under the bridge since then — particularly the intensification of the economic and geopolitical conflict between China and the U.S. But one of our
Market Summary — 31 December 2020
We wish all our readers a happy New Year. In our view, those who reckon 2020 as “the worst year ever” (such as Time magazine) need some education about the world’s dark historical catalog of plague, war, and sundry catastrophe. Still, it was certainly a challenging year, and we are
Technology, Productivity Growth, and Why Crazy Valuations Are Not Always Crazy
The trajectory of markets in 2020 has been extraordinary and unexpected. Looking back, both the depth of the pandemic crash and the strength of the rally that has followed it make sense. They were the product, on the one hand, of severe lockdowns, economic closures, and uncertainty; and on the
Market Summary — 24 December 2020
As we noted above, on a tactical basis, we believe a correction or consolidation is becoming visible on the horizon. The market’s rise into year-end has been strong, and as good as the big-picture backdrop is, no market goes up in a straight line forever. When the pullback or consolidation
Market Summary — 17 December 2020
The bullish consensus for 2021 has reached near unanimity, which is an invitation to anyone with a contrarian itch to scratch it. We agree with much of the bullish thesis. Historic excess liquidity, the control of the pandemic, fiscal support, reopening economies, and energized digitization all seem to be near-unarguable
India, Reform, and the Multipolar World
Trump’s Legacy It could charitably be said that the outgoing U.S. administration was characterized by non traditional trade strategies. But we can say that in spite of the polarization and vituperative rhetoric on both sides, the outgoing administration believed that it was in fact simply responding to longstanding economic and
Finding Opportunity Beyond the U.S.
In recent letters, we’ve written about the investment opportunities we see emerging outside the United States. This week, we’ll describe two: Japan and South Korea. (Next week, we’ll follow up with Hong Kong and India). Japan The Nikkei index is recovering to highs not seen since the early 90s, signaling
Market Summary and Outlook: Themes For the Coming Year
As we write, major U.S. indices are just off recent all-time highs; for some, such as the Russell 2000 index of small-capitalization companies, November was the best month in history. Some evidence suggests that the outperformance of certain pandemic-crushed sectors and industries was not really a rotation from growth to
