by Charles Cheng, CFA

 

 

On July 13^th, the US announced an inflation rate of 9.1% (5.9% core) year over year, higher than expected. Meanwhile, China GDP growth, announced not soon after, missed expectations at just 0.4% year over year. US Q2 GDP, which is to be announced on July 28^th, could be negative for a second straight quarter though much of it will be due to trade and inventory adjustments.

7 月 13 日，美國公佈的通脹率為 9.1%（核心通脹率為 5.9%），高於預期。　與此同時，在此不久後宣布的中國 GDP 增長同比僅低於預期0.4%。　將於 7 月 28 日公佈的美國第二季度 GDP 可能連續第二個季度為負數，但數據的變動大部分是由於貿易和庫存調整。　

 

 

12-month percentage change, Consumer Price Index

消費者價格指數12個月變化

來源：美國勞工統計局

 

 

The combination of high inflation and uncertain growth going forward are the Scylla and Charybdis (the twin dangers) that central bankers including the US Federal reserve will have to navigate. If the economy is headed for a downturn in the near future, raising rates too quickly could make the pain going down even worse. Leave rates too low and there is a risk that expectations for continued higher prices become entrenched. If that happened, then the Fed would have to eventually raise rates to significantly higher levels and cause a deep recession to get inflation under control. According to Federal Reserve chairman Jerome Powell at the end of June, the central bank believes that it can thread the needle between these two scenarios by dealing with inflation without causing a real recession and promote a healthy economy.

高通脹和未來增長的不確定性是包括美聯儲在內的央行行長們必須應對的進退兩難（古希臘神話中的斯庫拉與卡律布狄斯，意指雙重危險）。　如果經濟在不久的將來走向低迷，過快加息可能會使市場下跌得更加嚴重。　如果利率太低，那麼對價格持續上漲的預期就有可能變得根深蒂固。　如果發生這種情況，那麼美聯儲最終將不得不將利率提高到更顯著的高位及控制通脹，從而導致經濟深度衰退。　根據美聯儲主席鮑威爾 6 月底的說法，央行認為，它可以通過應對通脹在以上兩種情境中游刃有餘，而不會導致真正的衰退並促進健康的經濟生態。　

 

 

Investors on the other hand are not the ones steering the ship and have to consider that each these scenarios are possible paths going forward. They need to ensure that their portfolio or strategy is robust to all three paths (including the Fed’s ideal scenario) and also have a plan for action once the final path becomes clear. Certain types of companies can perform in any environment such as those with such a strong enough market position to dictate prices as well as a strong enough balance sheet to weather any financial storm. Also, one should not worry about near term underperformance. If your portfolio is not tilted towards one scenario and it comes to pass, it is likely that you will underperform the market in the short term, and that’s OK as long as you have a plan for what comes after. Most importantly, your strategy should survive in an extreme scenario.

另一方面，投資者並不是掌舵的人，他們必須考慮到上述兩種情況的其中任何一個有可能成為未來幾年的經濟趨勢。　他們需要確保他們的投資組合或戰略對所有三種路徑（包括美聯儲的理想情景）都相當穩健的，並且一旦最終某一路徑變得清晰，還需有一份具體的行動計劃。　某些類型的公司可以在任何環境中都能表現良好，例如那些具有足夠強大的市場地位來決定價格以及足夠強大的資產負債表以抵禦任何金融風暴的公司。　此外，人們不應該過於擔心短期的下跌。　如果你的投資組合不傾向於任何一種情況，但其中某一種發生的話，那麼你很可能在短期內表現遜於市場。　但那是OK的，只要你對後續的發展有一個計劃就可以了。　最重要的是，您的策略應該能夠在極端情況下存活。

　

 

 

In the legendary Greek poet’s epic, the Odyssey, where the metaphor comes from, Scylla is a six headed monster and Charybdis is a massive whirlpool. The hero, Odysseus, has no path to safely sail his ship in between the two monsters. Eventually, he chooses to sail by Scylla and lose six of his sailors rather than risk losing his entire ship to the whirlpool. In doing so, he is able to survive and move forward to accomplish his ultimate goals.

在斯庫拉與卡律布狄斯這一隱喻的來源—-希臘史詩《奧德賽》中，斯庫拉是一個六頭怪物，而 卡律布狄斯 是一個巨大的漩渦。　英雄奧德修斯無法在兩個怪物之間安全駕駛他的船。　最終，他選擇航經斯庫拉並失去了六名水手，而不是冒著將整艘船都丟進漩渦的風險。　因此他生存了下來並能夠繼續前進以實現他的最終目標。　

 

 

 

This article reflects the personal views of the author and not any firm’s and should not be viewed as an investment recommendation

 

大圖圖說：James Gillray, Britannia between Scylla and Charybdis (1793)

 

 

 

 

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