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1. Workers needed…

If you needed more data points on how tight the global labour market is, Vail resorts (a current holding in our S3 Global Opportunities Fund) is increasing its minimum wage to $20 per hour. This may not sound significant relative to what we are used to in Australia but for context, minimum wage was $12 just a year ago.

Wage inflation is likely to be a persistent theme for consumer facing services businesses. We think Vail is better positioned than most given its strong pricing power arising from ownership of unique assets and leading market share amongst destination resorts. We expect Lift ticket prices to rise by 5% to cover some of the shortfall. Further, Vail Resorts also benefits as a “re-opener” with international tourists finally set to return…We’re sure there will be plenty of Aussies hitting the slopes next Winter visiting Whistler, Vail, Park city or any number of their 40 resorts across North America!

2. Transitory is history…

A round up of the inflation snippets from this week:

  • US single-family rental prices jumped 13% in January from a year earlier according to the CoreLogic Single-Family Rent Index.
  • SPC Global is passing on what the CEO is calling the biggest price inflation shift in his career. Baked beans, spaghetti and Goulburn Valley fruits are set to go up 10-20%.
  • Tesla is raising prices in the US and China by 3-5%. The cheapest Model 3 in the U.S. is now US$46,990, according to its website.

History shows that the best performing sector in the US during rate rises has been the Tech sector. REITs second best is also surprising given the impact of higher rates is usually seen as a negative. But this time there is the US $9 trillion Fed balance sheet to consider as well…

Source: Bloomberg

3. Suits OUT, Meat-free Sausages IN!…

In a sign of the times, the UK statistics office announced changes to its inflation basket this week.

  • Items Deleted: Men’s suits, coal, and doughnuts.
  • New items added: meat-free sausages, sports bras, craft and hobby kits for adults and pet collars

We aren’t sure that ‘coal’ was ever in the basket, but we don’t argue with the statistics experts!


This article is prepared by Firetrail Investments Pty Limited (‘Firetrail’) (ABN 98 622 377 913, AFSL 516821) as the investment manager of the Firetrail Australian High Conviction Fund (ARSN 624 136 045), the Firetrail Absolute Return Fund (ARSN 624 135 879), the Firetrail Australian Small Companies Fund (ARSN 638 792 113) and the Firetrail S3 Global Opportunities Fund (ARSN 653 717 625) (‘the Funds’). Pinnacle Fund Services Limited ('PFSL') (ABN 29 082 494 362, AFSL 238371) is the product issuer of the Fund. PFSL is not licensed to provide financial product advice. PFSL is a wholly-owned subsidiary of the Pinnacle Investment Management Group Limited (‘Pinnacle’) (ABN 22 100 325 184). The Product Disclosure Statement (‘PDS’) and Target Market Determination (‘TMD’) of the relevant Fund are available via the links below. Any potential investor should consider the PDS and TMD before deciding whether to acquire, or continue to hold units in, the Fund.

Links to the Product Disclosure Statement: WHT3810AU, WHT5134AU, WHT3093AU, WHT7794AU

Links to the Target Market Determination: WHT3810AU, WHT5134AU, WHT3093AU, WHT7794AU

For historic TMD’s please contact Pinnacle client service Phone 1300 010 311 or Email

This communication is for general information only. It is not intended as a securities recommendation or statement of opinion intended to influence a person or persons in making a decision in relation to investment. It has been prepared without taking account of any person’s objectives, financial situation or needs. Any persons relying on this information should obtain professional advice before doing so. Past performance is for illustrative purposes only and is not indicative of future performance.

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