Why a company's pricing power should be at the heart of investment decisions

Investors must pay attention

The recent market turmoil was a perfect opportunity to test various theories.

One of them is that, as inflation returns, rising interest rates should play out favorably for cyclical companies, high beta sectors such as banks and indebted businesses.  In a word, market participants should avoid long duration assets and buy companies with strong and immediate operating and financial leverage. US stockmarkets suffer worst month in over two years This has proven to be, once again, wrong as the situation is (as always) more complex than the simple narrative of linking a strong economy to renewed inflation and asset rotation.  First, if some pockets of the US e...