Commentary

November 2021

Commentary on Inflation

Charlie Fricker

We think about inflation from two different perspectives, the first being from a market/macro point of view. This is relevant to how we want to position the portfolio as we think about what inflation will do to both the bond market and longer-term inflation expectations as a combination of both of these factors usually leads to a rising yield environment which may impact the more “growth” parts of the market as duration linked stocks tend to suffer when this occurs. Secondly, we look at inflation from a company specific perspective, and how the various dynamics that are causing the high inflation rates are impacting operational and financial performance of the companies that we own in the Fund. It is our view that inflation will be higher for longer than a lot of people expect/hope but not at the same levels we saw in the October CPI print. (continue reading)


November 2021

Infrastructure Spending

Charlie Fricker

As we move towards the end of the year, US politics will likely move back to the front of the news cycle. It is often said that nothing increases politicians’ decision making faster than an upcoming holiday, and with the Thanksgiving and Christmas holiday periods shortly upon us, there are several key items that the White House would like to tick off its check list. After the passage of the infrastructure bill, discussed in more detail below, items such as approving the recently renominated Jerome Powell for a second term as Federal Reserve Chair, reconciliation and the constant recurring issue of the US debt ceiling will all be headline news items over the final few weeks of 2021. (continue reading)