Tom Bodrovics welcomes back Bob Elliott, Co-Founder, CEO, and CIO of Unlimited Funds, who shares his insights on how to evaluate skills from luck in investment outcomes. The discussion also touched upon the current state of inflation in developed co…
Tom Bodrovics welcomes back Bob Elliott, Co-Founder, CEO, and CIO of Unlimited Funds, who shares his insights on how to evaluate skills from luck in investment outcomes. The discussion also touched upon the current state of inflation in developed countries like Europe, the UK, and the US. Despite recent supply shocks causing higher price growth, wages have matched or surpassed it, resulting in elevated rates exceeding central bank targets.
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Elliott also addressed the concerns of central bankers regarding debt and income dynamics, mentioning the risks of negative reinforcing cycles and comparing credit-driven economic expansions to sustainable income-driven ones. The speakers discussed the relationship between government deficits and economic growth, debating whether high levels lead to significant stimulus or a large debt burden.
Regarding labor markets, Bob addressed the rising costs of inflation and the impact on reshoring production in the US. The speakers touched upon de-globalization, parallel supply chains, and shipping costs as causes for price increases and disruptions. The Fed's current monetary policy stance was discussed, with potential future actions debated due to low unemployment and while inflation is still above target.
Bob questioned the significance of specific labor market numbers and he also touched upon why the US economy avoided a recession despite predictions. In this income-driven environment, Bob discussed the shift from growth to value stocks and the impact on investable assets in sectors with earnings and market consolidation. The supercycle in resource markets was also discussed highlighting investment lags behind demand and potential higher commodity prices contributing to inflation.
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