Supply Is A Bitch…and The Best Inflation Hedge in 2021

Good morning….

The community team of Stocktwits asks questions on Twitter once in a while that are just layups for silly answers. Yesterday they asked about an inflation hedge…


What a mess we are witnessing across in IPO’s, SPAC’s and Growth stocks.

Back in August of last year I wrote that it was a tidal wave of supply (SPAC’s specifically) that would kill this bull market.

Here we are in December 2021 and supply will not get the credit for this punishing period of lower prices. The blame will get neatly placed on inflation, China, Biden and/or The FED..

Of course policy has a lot to do with how markets behave, but the banks which are now at or near all-time highs have been gleefully pushing out companies via IPO and SPAC and the supply has just been overwhelming.

One excellent bookmark for me is the ‘IPO Dashboard’ on Koyfin (free). You can check the dashboard easily here and I have posted a screenshot below:

It is carnage.

This list does not include SPAC’s horrible showing in 2021 which is also due to endless supply. Here is the SPAC ETF in 2021 (down 40 percent from highs):

The unintended consequences of a perfect market of low rates and low volatility has been the endless offering of paper (supply).

Now we have to sop it up.

The sopping is coming at much lower prices.