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

Hey there, fellow investors! It's been a minute since my last update, but I couldn't resist sharing some insights on how my portfolio has been performing lately and what's on the horizon. So, let's dive in! Portfolio Performance Check-In: Straight to the point – my investments have been chugging along nicely, keeping pace with big shots like the S&P and Nasdaq. We're looking at a solid 10.1% return year-to-date. Not bad, right? Sure, it's a tad shy of the S&P's 10.7% and Nasdaq's 9.41%, but hey, it's all about the journey, isn't it? Winners and Losers: Now, let's talk winners and losers. On the bright side, shoutout to $Micron Technology(MU)$ $Meta Platforms, Inc.(META)$

How to screen for high quality businesses?Since the start of the year, challenging macroeconomic conditions have caused a massive selloff in global equities and led to huge portfolio drawdowns among equity investors. The S&P 500 is currently sitting just above bear market territory, 15% below its January peak. With inflation standing at a whopping 8%, the pain may yet be over as the Fed continues to engage in monetary tightening in an effort to combat inflation. While this may signal a temporary downturn, investors with a long time horizon can capitalise on this opportunity by adding shares of high-quality names into their portfolios. In this article, I share how Terry Smith, the founder and CEO of Fundsmith screens for high quality businesses to achieve long term capital gains as a fu

Last week, $Alibaba(BABA)$  reported its earnings for the quarter ended June 2022. For the first time in history, BABA reported flat revenue growth due to the fall in GMV of online physical goods caused by the impacts of Covid-19 resurgence and restrictions that resulted in supply chain and logistics disruptions in April and May. Revenue for its cloud segment also posted an increase of 10% year-on-year (yoy), marking a slowdown in growth due to softening demand from customers in China's Internet Industry. BABA's financial results this quarter were definitely disappointing but how does the future of the company look?Earnings callIn this section, I will dive deeper into BABA's latest earnings call transcript to look for ind

Two prominent fund managers and stock pickers, Cathie Wood and Michael Burry finally agree that the US economy is entering into a recession due to weak consumer demand.In an interview with CNBC's Squawk Box, CEO of Ark Invest ($ARK Innovation ETF(ARKK)$), Wood, said that "she thinks that the US is already in a recession" noting that excess inventory driving up costs and leading to wider-than-expected profit shortfalls for corporations like Walmart and Target is a “big problem” facing the economy. She warned that massive inventories which are often a leading indicator of demand have the potential to unwind growth amidst record-low consumer sentiment levels. Wood also admitted to being wrong about the duration of high inflation,