Inflation has been picking up and the question is being asked, is it transitory or more permanent? As I said in my most recent brief, "The answer is anything but clear. There are passionate arguments on both sides of the debate pointing to powerful inflationary and deflationary forces in the world economy."

This week, Howard Marks of Oaktree Capital Management wrote an article in the Financial Times of London that comes to the same conclusion. He says, "The truth is we know very little about inflation, including its causes and cures."

If you’re spending a lot of time thinking about inflation (as we are), I recommend reading the FT article, or his memo to investors on which it is based.

Inflation is an important market factor, but it's not one you want to bet too heavily on in either direction. As Salman points out in our Mid-year Review Video, the key is balance, because as Mr. Marks says, "I believe we should put even less stock in predictions surrounding price increases than in other areas [of macro-economic investing]."