A new year calls for some changes! I decided to use these updates to jot down random thoughts that come across my mind at the end of each month.

A format where I can quickly come back to these posts in the future to see where my mind was and how accurate my thoughts were.

We had a pretty violent correction. It felt worse than it actually was due to high valuation names and speculative growth stocks with no earnings getting hammered making the headlines.

I love embracing corrections to buy more stocks and that is exactly what I did. My buys were mostly in my highest conviction growth stocks.

Fear will always play a role in market dynamics. And in times of fear, is when we must keep a level head, filter noise, and execute our plans as we keep our eye on the ball far out into the future.

Ok on with the notes!

I think the FED has overreacted in terms of monetary policy. The risks of overreaction to reign in inflationary pressures in the economy may potentially lead to a recession.
I think the risk of recession is higher this year (10-15% likely).
I do not think run away inflation is something we should worry about as some are starting to argue.
Fear of rapidly increasing interest rates fueled sell off. FED’s however, still believe inflation will moderate once supply chain issues alleviate.
COVID is still a risk to supply chains around the world but improving.
More CEO’s are beginning to see improvements in supply chains ahead and more are signaling peaking.
I anticipated since early last year that wage inflation would be an issue for many companies. Looks like this is starting to pan out now as more businesses express concern. Expect margin compression for many businesses. Invest in strong companies with strong margins that have pricing back bone.
Tons of cash still on the sidelines.
I believe a slow increase in rates to 2% over the next 2 to 3 years should be digestible.
I think home prices are in a bubble in many parts of the markets.
I do expect inflation to moderate towards the latter half of this year.
I expect 3 to 4 quarter basis point increase in interest rates by the end of this year.