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Is Inflation On The Horizon?

The Federal Reserve Bank has printed ~25% of all USDs ever printed in just the last 15 months. Almost $9 trillion has been printed. As investors, all of us have experienced asset price inflation; equity valuations that are sky high with no connection to fundamental analysis or real business performance.  Yes, technically, the price of…

Is commission-free retail trading net-positive or net-negative?

Technology drives speculation in public markets. Removal of barriers amplify speculative behavior. Commissions were that barrier in retail trading.  A long time ago, back in 2019 to be exact, several electronic brokers jumped on the train of “commission-free” trades. Robinhood’s primary customer acquisition tactic since inception was commission-free trading. And then all online brokers joined…

Seeking Silence

Silence provides an empty page for us to doodle. It gives an artist an opportunity to compose in their mind before they produce the song. An attorney her opportunity to argue before winning the case. A surgeon her vision before performing the surgery. An athlete her play before hitting the game winning shot. And so…

U.S. E-commerce Q3 2020

U.S. Census Bureau of the Department of Commerce shared their latest update on e-commerce. In a nutshell, Q3 2020 metrics are: US retail sales: $1,468.9 billion (+12% QoQ) US e-commerce: $209.5 billion (-1% QoQ) E-commerce as a % of total retail sales: 14.3% E-comm YoY growth, however, from Q3 2019 to Q3 2020 is +36.7%.…

Is The Phillips Curve Dead?

The Phillips Curve shows an inverse relationship between inflation and unemployment. Graphically, it’s a simple representation and a heuristic model between two most critical areas of focus of the central bank.  Reflecting on current monetary policy, one can argue that Phillips Curve is dead. With extreme measures of quantitative easing (QE), near zero interest rates,…

The End Of Short Term Thinking

Short term thinking yields knee-jerk reactions to micro and macro events in life. It creates zero sum games between people, minimizes long term value creation and amplifies corner-cutting.  Let’s look at quarterly earnings guidance as an example. Companies reporting on the last 90-day performance and forward-looking guidance on what shareholders should expect. Shareholders want to…

Q2 2020 GDP Compression

It’s no surprise that GDP was compressed -32.9% in Q2 (link). A few weeks ago, I shared some thoughts on making sense of capital markets amidst COVID, where I discussed the original expectation of GDP compression being -42%. Here’s what we can expect from Congress and The Fed in the near future. Congress will continue to push…

TikTok ban?

TikTok’s ownership by Chinese conglomerate, Bytedance, has become a subject of heightened scrutiny over the last few months. There are two sides to this. On one end, it’s encouraging to see the US taking a strong stance against China’s own internet policies. Historically, Chinese policies have been off-balance and provided leverage for the region to…