Recently, Carnegie Investment Counsel Portfolio Manager/Regional Director Scott Inglis was a guest of Behind the Numbers, which is a podcast about the “real stories” behind business performance and valuation. Inglis talked with the host, valuation expert and bestselling author Dave Bookbinder. Scott provided detailed insights around demystifying noise in the market place”. Here’s an overview of the conversation.
The U.S. rejoined the 197-nation Paris Climate Accord. Under the accord, the U.S. has committed to reducing greenhouse gas emissions by 50% of 2003 levels. President Biden has also stated that his administration wishes to move the U.S. to net zero emissions by 2050.
There is a great deal of trepidation about the potential economic consequences surrounding this matter. The concern is that it will require a lowering of consumption in the U.S. and even our standard of life.
If these targets are not just posturing but serious goals, they may portend both large government spending and tax incentives. Rejoining the Paris Climate Accord may signify a historical capital spending boom by both government and private businesses.
Inflation is on the minds of many and there is no shortage of price increase anecdotes around the country. From commodities like iron ore and copper doubling in price, to paying MSRP for a year-old car, these observations of rising prices are coloring perceptions about general affordability, the dollar, the central bank and investments.
Whether we are experiencing inflation is not up for debate, however, the prospect of sustainable inflation is definitely debatable. Is it the ‘80s all over again? Can we objectively look at the pandemic-induced supply disruptions, a confluence of weather anomalies, lean manufacturing driven supply chain decisions and a Texas freeze, and call it a structural and sustainable inflation? Not really. At least, not yet.
Are we headed into a time of inflation? Many people and economists are debating this issue right now. In the “real world,” we’ve seen inflation in interesting areas such as Pokémon and NBA Top Shots trading “cards,” which had seen a spike up in prices earlier in the year. Housing prices are certainly rising. Plus, inflation is finding its way into commodities such as food inputs like soybeans, corn and more. Certainly, gas prices are higher at the pump than a year ago. And does it mean inflation is coming because of crazy high auction prices for things such as Jack Dorsey selling his first tweet ever as an NFT (non fungible token) for over $2.9 million?