The Timber Log is a quick overview of Timber Point Capital’s weekly investment meeting. If you would like to join the call or have questions about the content, please reach out to Patrick Mullin at pmullin@timberpointcapital.com
The information contained herein does not constitute investment advice or a recommendation for you to purchase or sell any specific security.
CPI print – we are not worried yet…comparing against 1st month of pandemic pricing…capacity constraints, logistics, reopening categories and OIL driving increases
- Continue to believe inflationary pressures are transitory, not structural
- Government policies not helping – lower wage individuals collecting unemployment benefits in excess of hourly wage
- Fed on hold until approach Trump administration peak employment…will they continue? We believe so.
- 30 year bond reacting only marginally, TIPS flat…inflation already priced in.
- Fed continues to believe inflation transitory, will its hand be forced? No.
Energy and other recovery sectors continue to lead while technology and other interest rate sensitive sectors lag
- Current narrative on inflation impacting high valuation stocks could be with us for a few months as resolve structural vs. transitory inflation debate
- Who has more pricing power over longer term, AAPL or PG? We believe AAPL.
- Who has more exposure to margin compression over near term, technology or staples? We believe staples.
Growth stocks walloped past few days…earnings have beaten consensus by a wide margin and analysts likely raise forecasts higher for ’21 and ’22…
- Vaccine will result in big near term growth numbers, but temporary…’21 could see 5-7%, ’22 still good into mid term election…
- Politics playing a role in how growth will be managed by Biden admin
- Vaccine has been fuel for reopening trade and economic growth projections….distribution now slowing down
- Where will economic growth be post fiscal/monetary stimulus? Secular growth names will have their day again vs. stimulus induced growth
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