covid restrictions have sickened supply chains around the world.

companies are reporting widespread rises in input, labor, and transportation costs. the government figures suggest costs for companies are rising at the fastest pace in a generation. for many (or most) companies rapid cost inflation presents a problem for shareholders. investors’ patience may soon wear thin.

limited negotiating power over customers, suppliers, or both, confounds profitability even in the best of times. we think current circumstances for corporate profits are perilous for many if not most companies. producers are at the leading edge of an inflationary wave.

against such risks, our portfolios are a fortress.

we select for ability to reprice services, among other things. we own 60+ companies with the traits and track record of compounding high returns and maintaining profits through cycles. these thoroughbreds are assembled at the exclusion of nearly 90% of companies on earth.

for us, the search for opportunities is unemotional. we leverage the wisdom and content of our former research team at credit suisse to comb through 1,000s of global prospects. we pour over expansive financial datasets to find rare new opportunities from without. we take measures to ensure ongoing adherence within.  

during our research and advisory careers preceding analog, we were fortunate to have learned how to carefully evaluate companies and reasonably value their securities. most critically we learned to subordinate our instincts to the produce of objective processes.

we believe our approach will yield superior results over time. 

compounding the effects of an inflationary pandemic: most investors hold too much equity, too risky corporate bonds and too few real assets (property and precious metals). we are unorthodox in our approach and contain equities to 25% in our typical portfolio. the mathematical result is a less volatile path to the same destination.

with that said, obvious choices apparent in difficult times are sure to fall out of favor as fortunes improve. we acknowledge the trading almanac has twice as many sunny days as cloudy. we at analog are investors - not traders. the academic evidence against profitable human intervention in investing is significant.