Sharing an excerpt from a client meeting, which is a useful demonstration of a) what’s front of mind to clients and b) our thinking.

I was thinking of your client who asked about the inflation outlook, and thus what if anything we needed to do in the portfolio.

I’d replied that we were mostly in the “transitory” camp, and suggested that supply-side bottlenecks would eventually sort themselves out (we’d been discussing the absolutely stonking price moves across chemicals, fertilisers, plastics and other commodities, aside from the usual iron ore and coal stories).

Here’s a nice graph showing the inflation story back in 2006 – 2008, which was mostly, as I think it is now, about raw material inputs. The economy roared back post the GFC, and supply curves (which slope upwards) took some time to respond. Subsequent to that 06 – 08 period, prices eventually settled down, which is what we think will happen now.


And of course, if they don’t, we’ve still got a sizeable allocation to energy as a good portfolio diversifier/hedge.

Anyway, just thought it was a useful bit of additional info.

Just a nice thread that helps illustrate lessons from history, which has a tendency to rhyme, if not repeat.

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