It’s the 11th December and another edition of Capnote Weekly Spotlight – dedicated to boosting your financial expertise and performance.
In this week’s edition (reading time 7 minutes), you’ll discover:
- 3 reasons inflation is not dead for the intelligent investor.
- Top gaining & declining trends including the largest ever loss in US farming.
- This week’s special offer – earn income from your data and expertise.
- Key events to watch especially for insight into the Industrial and Wholesale sub-sectors.
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Tip Of The Week: 3 Reasons Inflation Is Not Dead
Benjamin Graham is widely known as the “Father of Value Investing” and was also as a mentor to Warren Buffet. In his book, The Intelligent Investor, Graham states that [for an intelligent investor], there are 3 reasons to believe inflation is not dead.
- Since 1960, 69% of the world’s market-oriented countries have
suffered at least one year in which inflation ran at an annualized
rate of 25% or more. On average, those inflationary periods
destroyed 53% of an investor’s purchasing power. - Rising prices allow Uncle Sam to pay off his debts with dollars
that have been cheapened by inflation. Completely eradicating
inflation runs against the economic self-interest of any government
that regularly borrows money. - As recently as 1973 – 1982, the United States went through one
of the most painful bursts of inflation in its history. No one who lived through it would scoff at such destruction of wealth; no one who is prudent can fail to
protect against the risk that it might recur.
Though this book was first written in 1973, its advice is valuable today as we assess the Fed’s progress in its fight against inflation amidst market optimism of a soft landing. As Graham says, “The intelligent investor must always be on guard against whatever is unexpected and underestimated.”
Capnote Weekly Spotlight: 3 Reasons Inflation Is Not Dead
Also Read; Capnote Weekly Spotlight: Key Supply Chains For The Dow’s Highs
Meanwhile, according to The Intelligent Investor, the standard advice for investors seeking protection against inflation includes statements like “buy stocks”. However, Graham points out that this is not entirely perfect. Above is a chart of inflation against stock market performance arranged by size of annual inflation. While mild inflation allows companies to pass on increased costs to customers, high inflation wreaks havoc—forcing customers to slash their purchases and depressing activity throughout the economy.
Since the advent of accurate stock-market data in 1926, there have been 64 five-year periods (i.e., 1926–1930, 1927–1931, 1928–1932, and so on through 1998–2002). In 50 of those 64 five-year periods (or 78% of the time), stocks outpaced inflation. That’s impressive, but it also implies that stocks failed to keep up with inflation about one-fifth of the time. It’s worth bearing this in mind as we end the year and hold our breath for the next actions of the Fed.
This Week’s Special Offer 💰- Earn From Your Financial Data & Intelligence
Capnote is excited to announce that you can now earn income on the platform by contributing data and intelligence. Here’s how:
1. Sign-up to Capnote for free.
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Trending
Sentiment Markers 🌡️
Over the last week, cryptocurrency continued its rise with Bitcoin gaining over 14%. Though it has since fallen, it is still up 153% this year. With gold also retreating, the market’s economic concerns appear to be receding.
- US 10 year treasury +0.72%
- S&P 500 +0.21%
- Hang Seng -2.95%
- Crude Oil (Brent) -3.85%
- US dollar index (DXY) +0.72%
- Gold -2.73%
- Bitcoin +14.16%
Top Gains 🚀
Furthermore, Capnote regularly tracks industry, company and indicator performance in moving windows.
- eCommerce: Following a slowdown due to the Russia-Ukraine war, growth in the global eCommerce industry has resumed. Below is a historical and forecast revenue trend from Statista with expectations of a 10% increase in 2023.
Top Declines 🚩
- Agriculture: The agricultural industry has also experienced a number of headwinds this year including higher production expenses and falling prices for certain agricultural outputs. The USDA has forecast the sharpest decline in U.S. farm income in history.
Sign-up to Capnote for free (no credit card required) to read more.
Events & Notifications ⏰
Below is a selection of events and earnings expected this week.
- 2023-12-12 Earnings – Johnson Controls International Plc
- 2023-12-13 Earnings – Jabil Inc.
- 2023-12-13 Earnings – Adobe Inc.
- 2023-12-14 Earnings – Costco Wholesale Corporation
- 2023-12-14 Earnings – Currys Plc
- 2023-12-15 Earnings – Darden Restaurants Inc
You can also use Capnote’s Intelligent Timelines to find events and customize alerts.