With inflation running hot around the globe, many investors are looking to hedge against inflation. But is that the right goal?
On today's episode of Forward Guidance, Jack Farley speaks to James Davolos, portfolio manager at the Horizon Kinetics Inflation Beneficiaries ETF ($INFL), a fund that which, as the name suggests, aims to invest in stocks that benefit from inflation. Davolos argues that inflation will increase the value of scalable, economically resilient business models with exposure to hard assets, and he shares several examples, ranging from gold royalty companies and financial exchanges to timber companies and agricultural processing firms.
Timestamps
00:00 Intro
00:34 What Companies Can Benefit From Inflation?
07:19 The Macroeconomic Causes of Inflation
11:11 Supply Chain Issues and Commodity Shortages
17:01 Energy and Gold Royalty Companies
22:43 Common Misconceptions About Inflation Hedges
26:23 Inflation's Impact on Stock-to-Bond Correlations
37:01 Which Companies Can Pass Along Costs to Consumers?
38:12 What Sectors Are Most Vulnerable To Inflation?
41:24 Wage-Price Spirals
48:47 Emerging Markets and Inflation
50:10 Are Gold and Bitcoin Effective Inflation Hedges?
51:47 Other Inflation Hedges and The Importance of Valuation
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