Commentary

Inflation Here, There and Everywhere

What a week for price data! We have been writing about the possibility of higher inflation for months now, most recently here. We have also highlighted the most likely assets to benefit from higher inflation like copper, oil and energy stocks.

Commentary

There is An Alternative to Crazy Expensive Tech Stocks, We Just Need to Remove the Kaleidoscope Glasses

To say the market is bubblelicious is a bit of an understatement given that retail “investment” in call options and penny stocks is quite literally off the charts, dwarfing numbers we saw in 1998-2000.

Commentary

Productivity, an Additional Case for Homebuilders

There are a few ways to measure productivity. One simple way to measure productivity at the company level is to calculate sales per employee. Higher sales for the same number of employees obviously means each employee is pulling more weight. Profits are a byproduct.

Commentary

Party Like Its 1999

In this Q4 2020 slide presentation of our quarterly strategy report, we discuss: Bob Farrell’s Rules for Trading (#5 and #7 especially resonate with us right now). What the retail trading frenzy, recent IPOs and speculation can tell us...

Commentary

Get Ready for Services Prices to Accelerate Higher

We’re going to keep this post short and sweet because the charts speak for themselves. Today, preliminary Markit PMIs were released for January. Headline numbers ticked up, which is great and shows a continued expansion into the new year.

Commentary

What is the Best Hedge to Hot Inflation?

This week investors learned of president-elect Joe Biden’s initial bid for the next round of covid-19 relief. The number came in at $1.9tn. Importantly, included in this figure is mainly covid relief as opposed to a longer-term fiscal package that will be heavily weighted to infrastructure.

Commentary

The Probability of Stagflation is Rising

This week we were privy to both new inflation and initial unemployment claims data. The CPI data revealed a rather mundane inflation scenario. Meanwhile, the weekly initial claims number came in at a whopping 853K and missed estimates by the largest amount since June.

Commentary

Breakeven Inflation is Breaking Out

Inflation expectations as priced by the Treasury market are hitting 18 month highs just now. As the reader can see, inflation expectations across all treasury maturities are at cycle highs.

Commentary

Gold: Testing Patience But Toeing the Line (For Now)

Since early August the “barbarous relic” has corrected some 9% while many other assets have ascended to all-time highs. This has no doubt caused a bit of consternation for holders of gold who have been using the metal not as a hedge, but as a capital appreciation vehicle unto itself.

Commentary

The Election has Crushed Volatility

As election results continue to trickle in suggesting Joe Biden will be the next president, there still remains a bit of uncertainty with respect the final electoral vote tally as well as any legal challenges that will emerge in the coming days.

Commentary

Foundations for a New Structural Gold Bull Market

In this presentation, we outline our argument for gold entering a new structural bull market.

Commentary

Stock Options Traders are Back at the Speculation

In the last few weeks stock market sentiment as expressed in options has come full circle. Back in August we were noting a rather amazing level of outright speculation in stock options, mostly by small traders that were buying short-dated out of the money calls on the FAAMGs.

Commentary

A Broader Market, but Not a “Value” Rotation

In recent weeks the market has been notably broader in terms of the upside participation from stocks other than FAANMGs. Typically, this type of action in the early stages of a business cycle would be strongly associated with the “value” style working, since “value” companies skew considerably smaller than “growth” companies in aggregate.

Commentary

Correction Update: Correction Continues

We’ve been writing for the last month about the risks, and then the corrective activity in the stock market. Even as the market didn’t peak until the first few days of September, it “feels” like this pause has lasted longer than that.

Commentary

Innovating Gold Production

Franco-Nevada is the world’s largest gold royalty and streaming company. This means the firm invests in gold and mines, but indirectly, the idea being to provide investors with exposure to gold prices and gold exploration while limiting the risks of investing directly in mining companies.