Last month marked the highest level of inflation in 40 years as the Consumer Price Index (CPI), which is a broad measure of everyday goods and services soared 9.1% from a year ago. In economic terms, inflation refers to the general increase in the prices of goods and services in an economy. While a small but positive inflation rate is a good sign that an economy is growing, a high inflation rate is bad for consumers, businesses and investors as it erodes purchasing power and gross margins. As an investor, recognising the effects of inflation on the economy is key to my investment strategy and choosing which assets to invest in.After watching the steady rise in inflation over the last couple of months, I began to realise that the macroeconomic environment has changed drastically from w

In my last article, I expressed how we have just entered the second phase of the bear market where corporate earnings start to fall due to weak consumer demand. This thesis is supported by Michael Burry, who claims that despite the worst start to a year in five decades, we are only halfway through the bear market. Even Chicken Genius Singapore said in his latest video that he is bearish in the short term as he expects earnings to fall.The current macroeconomic issues definitely pose a heavy challenge to US companies as consumer sentiment starts to fade in anticipation of an inevitable recession. Since the start of the year, companies have been issuing weak forward guidance as they struggle to satisfy investors who have been expecting a post-pandemic economic boom. This led to phase one of

Netflix’s shares jumped over 15% after reported third-quarter earnings last week. The streaming company posted better-than-expected top and bottom-line results, as well as an addition of 2.41 million net global subscribers, more than double the adds projected a year ago. In its letter to shareholders, Netflix also announced that it was no longer going to report its paid membership numbers, as it explores the development of new revenue streams like advertising and paid sharing. The streaming giant will be launching a new ad-supported subscription plan in North America and Europe starting in November this year. The plan will be 20-40% below the current starting price, will have ~5 mins of advertising per hour, frequency capping and strong privacy protections. The company believes that this p