Cross-Asset Strategist & Quantitative Analyst, Pennock Idea Hub

Cam Hui

Cam Hui has been professionally involved in the financial markets since 1985 in a variety of roles, both as a quantitative equity portfolio manager and as a sell-side analyst. He graduated with a degree in Computer Science from the University of British Columbia in 1980 and obtained his CFA Charter in 1989.

Cross-Asset Strategist & Quantitative Analyst

US Wages Are Resurgent, Even if Markets Haven't Noticed; Keep Your Eye on Inflation

3 Months of MoM Inflation Oblige Stealth Tightening; Overvalued Equities to Fall

Pennock Idea Hub

We are creators of independent equity research. The Pennock Idea Hub team are veterans of the investment industry. Much of our team has spent their careers at Merrill Lynch, Deutsche Bank, RBC Capital Markets and Wood Gundy. We have taken every aspect of research back to the studs and returned to first principles. The Pennock Idea Hub marries the interests of the sell and buy side. 

We offer the best research for institutional investors by:

-Only publishing research from veteran analysts
-Eliminate the inherent conflicts of the traditional sell and buy side relationship
-Ensure our team is always accessible; collaboration with clients nurtures our collective success

Cross-Asset & Quantitative Research

Cross Asset Strategy

Both the June CPI and PPI came in hot and well ahead of expectations. There was the inevitable debate about the transitory nature of the price increases. Looking longer term, however, the conventional models for explaining inflation have been unsatisfactory. In the face of the apparent failure of these conventional models, we offer an alternative wage-based theory of inflation.We conclude that the historic imbalance between capital and labour has become extremely stretched and the pendulum is swinging back. For investors, this presents a number of challenges as the returns to capital compress and inflation rises.The conventional hedge against inflation is to buy shares of companies that can pass through price increases. This includes companies with strong branding or able to extract monopolistic profits, commodities and resource extraction companies in mining and energy. An unconventional and overlooked investment strategy is trend following, as outlined in a recent <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3813202" target="_blank" rel="noopener">paper</a>, “The Best Strategies for Inflationary Times”.

Both the June CPI and PPI came in hot and well ahead of expectations. There was the inevitable debate about the transitory nature of the price increases. Looking longer term, however, the conventional models for explaining inflation have been unsatisfactory. In the face of the apparent failure of these conventional models, we offer an alternative wage-based theory of inflation.We conclude that the historic imbalance between capital and labour has become extremely stretched and the pendulum is swinging back. For investors, this presents a number of challenges as the returns to capital compress and inflation rises.The conventional hedge against inflation is to buy shares of companies that can pass through price increases. This includes companies with strong branding or able to extract monopolistic profits, commodities and resource extraction companies in mining and energy. An unconventional and overlooked investment strategy is trend following, as outlined in a recent paper, “The Best Strategies for Inflationary Times”.

How To Engineer Inflation