• Inflation looks to be one of the biggest impacts of the war in Ukraine. Russia and Ukraine account for roughly one quarter of all global wheat exports, which is why its price hit its highest level since 2018. Additionally, Russia is the second largest crude oil producer, causing oil prices to rise above $100 for the first time since 2014.
• Of the 63 startups with less than $10 million in revenue that went public last year through a SPAC, nearly half of them did not meet their projected revenue growth targets. On average these companies missed their targets by a shocking 53%. The SEC seems likely to add more regulation to SPACs in the near future to prevent this lackluster performance going forward.
• The MSCI Emerging market index has underperformed the S&P500 by an average of 10% over the past decade. However, companies in the emerging index are expected to grow their earnings by 10.2% this year (vs. 8.9% for the S&P500) and trade at a discounted 12x forward earnings (vs. 19x for the S&P500). This is the largest valuation gap in 20 years.
• Since 2010 bitcoin has had a correlation of only 15% with US equities, 4% with US government bonds and -1% with gold. Yet, Bitcoin’s return over this period has been attractive, equaling 150% annually. The real problem is the volatility has also been high, averaging 200% annually. Bitcoin has fallen 80% from its previous high three times since 2010.