Global Opportunities Beyond the Radar

Inflation Headwinds: Why This 256-Year-Old Company Could Fly


In 1929, when the stock market crashed following a long-roaring post-pandemic run (Spanish flu), the impact on asset prices was devastating as expectations plunged from euphoria to terror.

You know what happened.

To this day, investors and governments fear asset bubbles. While past experience shows that stocks may dip more deeply than other assets, they can also recover in a few years. More illiquid markets like property may be scarred for decades.

Of course, our digital and globally connected economies move much faster than they did in the 1920s. We may roar ahead in the 2020s for a much shorter time before investors (and governments) realise asset prices are far ahead of their intrinsic worth.

Beyond supply and demand, expectation has the greatest impact on asset prices

Here in Auckland, we’ve had a huge run-up in house prices. In the order of +26% since Covid. More than in the UK and the US — which have also had sizeable jumps.

Turns out, if you give Kiwis the lowest interest rates in living memory, they’ll consummate their love of property big time. Now things look about to change.

While there are still shortages, the market is on a knife-edge. And could go either way.

One lesson I’ve learnt over the years is that markets can change very quickly. Because expectations can change overnight.

With interest rates set to rise and inflation creating fearful ripples, it’s time to switch your focus and invest in long-term value.

We believe we’ve found a company that offers the perfect mix of stability and income in this frothy environment.

This business has been around for over two centuries, and it may be robust and diversified enough to profit from what comes next…


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