Inflation
Inflation distorts a company’s income statement in three distinct ways, writes Gaurang Trivedi, CFA.
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.
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.
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.
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.
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.
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.
Let's stop saying "negative interest rates" and come up with a new word for a new phenomenon.
Deflation is a thing, but what does it mean?
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.”