10k Words - October 2021

Apparently, Confucius didn’t say “One Picture is Worth Ten Thousand Words” after all. It was an advertisement in a 1920s trade journal for the use of images in advertisements on the sides of streetcars. Even without the credibility of Confucius behind it, we think this saying has merit. Each month we share a few charts or images we consider noteworthy.

This month we start off with a picture that really does tell a story - Goldman Sachs looking at Return on Equity at an industry level and where it sits currently relative to the past. Bloomberg has the inflation story covered off, showing expectations at both extremes had levelled off after recent rises and providing greater perspective by using a two-year inflation figure. Then we leverage off charts we have highlighted in recent weekly Small Talk updates to Equitable Investors' clients: The FT showed us how equity portfolio weightings to China and Hong Kong have been in decline. Kailash Capital charts the huge run in US price/sales multiples back to "dot.com" levels (albeit in a different interest rate and cost of capital regime) and we look at how Australian small business is searching for finance.

Return on Equity by Industry (US)


Source: Goldman Sachs


Inflation expectations in the US have increased but at the extremes the rise has come to a stop
Source: Bloomberg


Two-year inflation rate over long-term and short-term views



Price/Sales in the US market now v. "Dot.com" era



Global equity funds reducing exposure to China and Hong Kong



The search for "business loans" in Australia

Source: Google, Equitable Investors

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