You should use the graph with demand & supply shift at the same time. Some of the supply is inaccessible due to bottlenecks (logistics).
As to cyclicals - watchout for too quick assessments. Outside of logistics nothing is assured rn, second- & and third-order effects could perturbate lots of businesses that seem to be beneficiary but in the end could be casualties.
Michal, supply is quite flat (actually few pp up yoy), but as most companies reduced inventories last year, they are all trying to build it up shifting up the demand curve to unseen levels. I noticed that in ship cointeinerships supply curve is even more inelastic (steeper) vs. graph above👆, at least in short term.
Re cyclicals - you’re right, it’s so volatile now, easy to get to wrong conclusions in that environment as we are yet to see those 2nd & 3rd order effects.
Anyway, beneficiary cyclicals of that environment (+ potential multiples expansions) might bring astonishing investment returns for savvy investors. No one said it’s easy to find them.
You should use the graph with demand & supply shift at the same time. Some of the supply is inaccessible due to bottlenecks (logistics).
As to cyclicals - watchout for too quick assessments. Outside of logistics nothing is assured rn, second- & and third-order effects could perturbate lots of businesses that seem to be beneficiary but in the end could be casualties.
Michal, supply is quite flat (actually few pp up yoy), but as most companies reduced inventories last year, they are all trying to build it up shifting up the demand curve to unseen levels. I noticed that in ship cointeinerships supply curve is even more inelastic (steeper) vs. graph above👆, at least in short term.
Re cyclicals - you’re right, it’s so volatile now, easy to get to wrong conclusions in that environment as we are yet to see those 2nd & 3rd order effects.
Anyway, beneficiary cyclicals of that environment (+ potential multiples expansions) might bring astonishing investment returns for savvy investors. No one said it’s easy to find them.