Practical analysis for investment professionals

Inflation


Inflating Equity: Inflation’s Impact on Financial Statements and ROE

Inflation distorts a company’s income statement in three distinct ways, writes Gaurang Trivedi, CFA.

Top Five Articles from March: Inflation, Manager Selection, Skill Ratio

The introduction of the Skill Ratio by Daniel Blais, CFA; Brodie Gay's examination of how inflation is underreported; and an exploration by Ziad Abou Gergi, CFA, of the manager-selection process, are among the top posts from March.

Why Isn’t There Any Inflation?

Published estimates suggest inflation has been nonexistent despite extended, near-zero interest rates and a near doubling of the M2 private money supply since the recession.

Global Inflation-Linked Bonds: A Primer

Michael Pond, CFA, delivered an interesting primer on inflation-linked debt at the recent CFA Institute Fixed-Income Management Conference. So what are inflation-linked bonds? They are most typically debts issued by sovereign nations whose nominal interest rate is adjusted, either up or down, by an inflation measure.

Interest Rates, the Fed, and Inflation’s New Normal

If new disinflationary pressures are left unaccounted for, inflation, holding all else equal, will remain subdued, and the pace of rising rates will be slower than was expected by either the market or the Fed.

Weekend Reads: The Troll Economy in Seven Charts

There are plenty of risks to be mindful of given the current state of the markets. But a US recession is not one of them, says Will Ortel.

Three Reasons Why It Is Still a Good Time to Talk about Inflation

Is it time to put conversations about inflation risk on the back burner? Questions like this illustrate a major flaw in the way many investors approach protecting their portfolios against inflation risk: Discussion starts only after rising inflation is already a problem and inflation hedges are expensive.

Introducing the Unterest Rate

Let's stop saying "negative interest rates" and come up with a new word for a new phenomenon.

Weekend Reads for Finance Pros: Hedge Funds, Charlie Munger, and the World Cup

Charlie Munger once said: "In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time — none. Zero. You’d be amazed at how much Warren reads — and how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.”



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