Thoughts

Unilever shareholders took a bath yesterday

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Unfortunately less relaxing than with Badedas Volumes grew 4% & prices rose 1.3% but turnover only increased 0.3% despite 1.4% from acquisitions EPS fell 2%, Free cash flow fell €500m to €2.4bn and they cut their underlying margin outlook But they’re on 20x forward earnings… What happened? Well, last year when we were stockpiling PotNoodle … Read on

I did something yesterday that I’ve never done before.

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No, not bungee jumping or parachuting, I read the transcript of the FOMC meeting Because I know what companies on the ground are saying about inflation But I wanted to see if the Fed still thinks it’s “transitory?” So what did “Chair Powell” say about inflation forecasts & forecasters? “There is no great forecaster of … Read on

Simple is best, but not always.

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Like with ETF construction The largest holding in the Russell 1000 & 1000 Growth indices is Apple The largest in the Russell 1000 Value index is Berkshire Hathaway Whose largest portfolio holding is… Apple $108bn of their $447bn equity value How does that make sense? “Russell style indexes are built using three highly representative growth … Read on

Forecasting Macroeconomics is a dangerous occupation

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So I prefer facts to forecasts One of which is that US Producer Price Index (PPI) was 9.5% in April, a level last seen in June 1981 apart from 3 “transitory” months mid-2008 So spare a thought for the currently working, developed market economists, few of whom are likely to have worked during inflationary times … Read on

“ESG is transitory” is the common narrative

Sorry, “inflation is transitory” ESG is here to stay, right? But what if ESG is CAUSING inflation Is inflation still transitory? “Environmental” in ESG means moving from fossil fuels to renewables Which is happening IEEFA.org details 77 financial co’s that are restricting fossil fuel lending to oil & gas co’s, & 145 that have announced divestment … Read on

The pendulum always swings too far.

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In 2007, the performance of the USA was well behind the Rest of the World over 1, 3, 5 7, & 10 years. No advisor looking at this performance table would have steered any clients in the USA’s direction. Unless they’d remembered performance tables are always history. ETF assets at the time – $0.8trn. Roll … Read on