Economic Thoughts
I had made a previous post titled "A smooth sea never made a skilled sailor," where I discussed the current (at the time) macroeconomic outlook.
It has been 85 days since that post, and I want to update you with some additional items I find important.
It can be relatively easy to get caught up in just focusing all of your attention on your business and not paying much mind to what is going on around you. I believe it's dangerous to think any company is insulted against the forces of a broader economic downturn. I find it pertinent to monitor this to allow the business to be agile and foresee potential changes in market conditions. I am a visual learner and find that using images to tell a story makes it easier to digest information.
Below will be screenshots of the data I am talking about and some commentary. You can only be so informed, and even with all the data in the world, you can make the wrong assumptions (as could undoubtedly be the case here).
I always enjoy hearing from you all so if you have any thoughts or questions (related to this article or not) please leave them in the comments!
US Producer Price Index Truck Transportation of Freight - PPI Freight Monthly 30Jun2009-30Jun2022
Above you will see the cost inflation associated with the primary forms of freight transportation. The two vertical red lines indicate the period in which Minted New York and Minted Health has been operating. As is evident, the cost of moving products from manufacturing to their destination (our warehouse and ultimately the end consumer) has risen quite drastically. This puts pressure on product margins and forces the conversation around "raising prices." We have not had to do so because I am confident this inflation will come down and stabilize at a more reasonable number. It is important to remember that these graphs/indicators usually lag the current environment.
US PPI Finished Goods NSA Year over Year% - Monthly 01Jan1970-30Jun2022
The Producer Price Index for final demand measures the average price change received by domestic producers of goods, services, and construction sold for personal consumption. Again, the 2 vertical red lines are the window in which we have been operating. I find this information somewhat comforting because we have been producing products in a period where the cost to do so is considerably higher than in years past. If there is a reversion to the mean, our expenses should decrease slightly.
US CPI Urban Consumers Year over Year NSA Misery Index - Monthly 01Jan1948-30Jun2022
Above, you can see the recent uptick in the misery index. This metric is calculated by adding the US inflation rate and the US unemployment rate. Inflation across all things looks to be the driver of this uptick since unemployment remained relatively unchanged. It's important to note the period from the 1970s through the 1980s. In 1973, inflation more than doubled to 8.8%. Later in the decade, it would go to 12%. By 1980, inflation was at 14%. This was controlled through an aggressive contractory period initiated by the FED. Something to continue to monitor as our inflation prints are released, potentially forcing a more substantial FED hand in getting a handle on current inflation rates.
Chicago Fed Survey of Business Conditions 6-12 Month Outlook for US Economy
The Chicago Fed released a survey of business conditions outlook. Only 17% of respondents said they expected economic activity in 2023 to grow. A relatively bleak outlook for the next 12 months. As I said at the beginning of this post, it's important to absorb as much information as possible to make informed strategic decisions. To see this report come in LOWER than the trough of March 2020 is relatively concerning.
Training
This weeks training block was 58 miles with 5 lifts:
Monday: Rest (Lift - Push)
Tuesday: 11 Miles (Med-Long Run) (Lift - Pull)
Wednesday: 13 Miles (Med-Long Run) (Lift - Legs)
Thursday: 5 Miles (Recovery) (Lift - Push)
Friday: 9 Miles (Lactic Threshold) (Lift - Pull)
Saturday: 5 Miles (Recovery) (No Lift)
Sunday: 15 Miles (Med-Long Run) (No Lift)
The heat has become a steady challenger. This past week was intense, and I think the heat will break. Starting runs in the early morning has helped dramatically, but humidity is a tradeoff. Hotter in the evening with less humidity or cooler in the morning with more humidity.
I assume the majority of your investments are being made into minted but would love for you to share a more in depth breakdown of what you are invested in within the public markets!
I'm interested in what caused that super rapid increase in price of overseas shipping the past maybe six months. Taking me back to junior year AP Econ.