I have been turning to charts more regularly for my weekly blog posts than I have in the past. Like most people, I see many of the challenges and price pressures resulting from the massively disrupted global supply chain. It shows up in terribly unreliable contractors (I’m having a pool built so I am experiencing this first hand) and the significant increase in the cost of materials that are leading to the rationing of some goods like plywood and even chlorine.
Inflation is clearly one of the hottest topics for investors in particular and society more generally as the following chart shows. Core inflation has not moved commensurately with the exploding interest in the topic.
The following charts show why inflation is such a hot topic.
Although I’m in the camp that the Fed will stick to its word and not raise short-term interest rates until after 2023 at the earliest, the market is betting differently. Rather than focusing on when the Fed will start raising rates, let’s assume that they will.
Here is GameStop’s stock price chart for one month. Setting aside that it was up 62% for the time and day when I captured this screenshot, it’s up over six times during this one month period. And at its peak, it was up about 10 times!
Now let’s look at a three-month view and the meteoric rise can be put in more perspective.
With China having gotten a lot of heat for Covid-19 I thought I would end this post with advice that I think one of its great philosophers would have given had he been alive today. Confucius lived between 551-479 B.C. According to Wikipedia,
I’m not one to typically advocate following the herd but in the case of the coronavirus, I am having a hard time seeing an end game that doesn’t have herd immunity as the ultimate goal. And this could take a long time and lead to a lengthier economic contraction (to put it mildly) and even more massive federal intervention through government spending and Federal Reserve support of financial markets.
CWS Capital Partners LLC is an SEC registered investment advisor. The statements and information on this page do not constitute an offer to sell any securities or represent an express or implied opinion or endorsement of any specific investment opportunity, offering or issuer. Any discussion of performance or returns is not indicative of future results. Any market information is for illustrative and informational purposes only.
The views, statements, opinions and information expressed on this website/blog are intended to be educational and informational only; and may not necessarily be the views of CWS Capital Partners, LLC and its affiliated entities. They are also not intended to be and should not be construed as either an offer or recommendation of any security, portfolio of securities or investment strategies. Any market information (e.g. articles, news, analyses, opinions, etc.) should not be regarded as a description of advisory services offered by CWS Capital Partners, LLC and its affiliated entities. Any discussion of performance or returns is not indicative of future results.