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• Published on 1 August 2025
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Published on 12 September 2026
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Published on 12 September 2026
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Published on 12 September 2026
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Published on 11 September 2026
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Published on 11 September 2026
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Let’s be honest, shall we? The collective wisdom of central bankers and economists has been, to put it mildly, a bit off the mark. That “transitory” inflation they promised us a couple of years ago has turned out to be as temporary as a tattoo. It’s sticky, it’s stubborn, and it’s forcing anyone with a bit of capital to think very differently about where they put their money.
The great hope for a swift return to cheap borrowing has all but evaporated. Instead, we’re left in a world where costs are high and money is expensive. To me, this isn't a catastrophe. It’s a clarification. It draws a very clear line in the sand between the businesses that are built to last and those that were just coasting on a decade of easy credit. It separates the robust from the flimsy, and for an investor, that clarity is incredibly valuable.
When the cost of everything from sugar to shipping goes up, a company has two choices. It can either swallow the cost and watch its profits shrink, or it can politely pass that cost on to its customers. The companies that can do the latter without anyone really batting an eyelid are the ones I find fascinating.
Take a giant like PepsiCo. When their costs rise, do they wring their hands and issue a profit warning? Not really. They just nudge up the price of their drinks and snacks. You might grumble for a second at the checkout, but you still buy them. Why? Because decades of advertising and habit have made their products feel like a small, non-negotiable treat. That, right there, is pricing power. It’s the ability to protect your own business by making the customer absorb the inflationary hit. It sounds cynical, I know, but from an investment perspective, it’s a beautiful thing.
Now, let’s talk about the other side of this coin. High interest rates are a nightmare for companies drowning in debt. Think of it like a homeowner whose cheap, fixed-rate mortgage suddenly expires. The monthly payments shoot up, and suddenly all that disposable income vanishes into the bank’s coffers. It’s the same for businesses. Companies that borrowed heavily when money was cheap are now finding that servicing that debt is crippling them.
This is where a clean balance sheet becomes a superpower. A company like Energizer, the battery maker, isn't wasting its cash on enormous interest payments. Whilst its over-leveraged competitors are struggling to keep the lights on, Energizer can keep going, and going. This financial prudence allows it to not only survive but potentially gain ground as weaker rivals are forced to pull back. It’s a classic tortoise and hare situation, and in this economic climate, my money is on the tortoise.
This combination of being able to dictate prices whilst not being beholden to creditors is the bedrock of a resilient investment strategy today. It’s not about finding some tech unicorn that promises to change the world. It’s about identifying sturdy, well-managed businesses that can navigate the choppy waters we find ourselves in. It’s this very logic that underpins strategies focused on Pricing Power In An Inflationary World, which zeroes in on exactly these types of resilient firms.
Ultimately, this isn't about trying to predict when inflation will finally cool down or what a central banker might say next week. That’s a fool’s errand. It’s about recognising the fundamental qualities that make a business strong, regardless of the economic noise. In a world of persistent inflation and high rates, the ability to raise your prices and the discipline to avoid debt are not just advantages. They are, I think, everything.
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View the full Basket:Pricing Power In An Inflationary World
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Published on 12 September 2026
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Published on 12 September 2026
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Published on 12 September 2026
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Published on 11 September 2026
Read article
Published on 11 September 2026
Read article