Inflation would be the greatest thing to happen to me.
I selfishly want the government to spend as much money as possible. “You can’t print money forever!” everyone is shouting.
Yes you can. And they will.
They’ve been printing money for decades, and only now it’s making the headlines.
The reason I am selfishly supportive of inflation is that there is a well-known maxim in poker that “money flows clockwise.” If you sit to the left of the weakest player at the poker table, then eventually you will have all of their money.
Every time they bet, you raise them, scaring out all of the other players. So you are now “heads-up” with the weaker player. It’s just the two of you. Luck will give him some hands, but luck/skill will give you most of the money.
In inflation, the same thing happens. Print up a trillion dollars and give it to everyone… and where does it end up?
Eventually it’s all put in the stock market or in real estate. To be fair, some of it is now showing up in crypto.
Inflation of a currency occurs when goods that are priced in that currency go higher (IN THAT CURRENCY) year-over-year or month-over-month. For instance, gas — which you buy with dollars — is over $3 a gallon for the first time since 2008.
This is VERY important to understand. Gas itself is not different. Gas is not even worth more UNLESS it is priced in US dollars.
Everything you own goes up in value, but ONLY IF it is priced in US dollars.
What do I mean?
Here are things you might own that will go up if inflation goes higher:
- Real Estate
- Services you offer
The more you own of the above, the less inflation hurts you.
And if you own “Good” stocks or “Good” real estate, then you will make a lot of money during inflationary periods.
But what’s a good stock or good real estate?
Without inflation, it is very hard to predict the stock market. When there is no inflation, the stock market will stay the same except for stocks that are growing. And it’s very hard to know which companies will grow.
Remember this: Almost all of the growth in the stock market over the past 100 years has occurred because of inflation. I don’t give a shit about “candlesticks” or P/E ratios or what The Wall Street Journal says.
So, ok, if you own a basket of stocks — and that is the bulk of your net worth — then you will survive inflation.
But how can you BEAT inflation?
It’s simple. Just own stocks in an industry that is growing faster than inflation.
Some industries are fully mature, and I would not bet on them. Sure, Exxon and Chevron will go up when gas prices are going up. But they are not interesting, and eventually their stocks settle down.
The oil industry might even be in trouble as renewable energy gets more realistic.
But just look in your life. Do you drive more? Do you use the computer more? Do you read more? Ask yourself which activities you do are “inflating.”
Is medical care rising? Are people eating more?
I don’t know the answers. These are difficult questions. I don’t even know if people are using computers more.
However, I do know this: I am using more data. And more industries are using my data.
I asked a marketer the other day how narrow they can target the people they are advertising to.
“We know how many strawberries you ate last month,” she told me.
There is so much data about all of us that they can predict almost everything about you.
A friend of mine sells software to car dealerships. The software tells the car dealership which people in their area are going to buy a car in the next three months, and what car they are going to buy.
“We use AI and data,” he told me.
“We know when you bought every car you’ve ever bought. We know what cars. We know what dealers. We know what features you asked for. So if you bought a Toyota three years ago from XYZ dealership… and we know you buy a car every two or three years… we sell that information to the dealership next door, and they simply call you (we have your phone number also) three months before we predict you will buy your next car. And we tell you we have the next Toyota in stock, and we’ll give you a deal.”
Simple. “But where do you get the data?”
He looked at me with pity. “The data is everywhere. And if you know where to look, you can find it. We scrape data off of thousands of different websites that are now storing all sorts of data about each person.”
This is the business of the future. This is the technology described by the movie Minority Report, where they use data to predict if you are going to commit a crime. This is the technology of the Isaac Asimov classic science fiction series, “The Foundation Trilogy” where they use data to basically predict… everything.
This is what Starbucks now uses to predict when YOU will show up at Starbucks and what you will order, and they have it in the oven five minutes before you arrive. This happens right now.
The data storage / Big Data / AI industry is growing faster than inflation.
But what stocks should you buy to take advantage? It almost doesn’t matter. You could buy all of them. (But read to the end for a hint at what’s coming tomorrow.)
You can buy storage companies per vertical (medical / vehicle / media, etc). You can buy data storage companies by function (if they make storage hardware, storage software, Big Data AI companies, Software-as-a-Service companies, etc).
Is it really that simple? Yeah, it totally is.
What’s the fastest growing industry in the past 30 years? The Internet. Who are the richest people now? Internet billionaires: Jeff Bezos, Elon Musk, etc etc.
In the 1950s, the fastest-growing industry was oil. The billionaires were J. Paul Getty, the Rockefellers, and the Ewing family from “Dallas.” All oil money.
Quietly, the latest billionaires are coming from the cloud storage industry. Snowflake, a cloud storage company that had a huge IPO last year, is now worth $60 billion with $600 million in revenue.
Companies typically aren’t worth 100 times revenue. That’s ridiculous. UNLESS there is inflation. In which case, it’s normal. The industry will grow, the dollar will be worth less, and the stocks will go higher and higher.
The CEO of Snowflake is probably worth over $2 billion now. All since last year.
Right now everyone is throwing a shit fit over inflation. Don’t be a complainer. Look around you, be aware of the situation, and then benefit from it.
Inflation is good for you and me. Let them talk all they want on CNBC and the WSJ.
I will sit to their left…
In fact, I’ve just finished research on a few stocks that are bound to cash in on the momentum in cloud computing.
And everything I’ve shared with you these last three days comes to a head tomorrow. That’s because tomorrow is the world premiere of my show “To $1 Trillion And Beyond.”
As you’re about to see, I’ve gone behind all four of today’s $1 trillion companies… Amazon, Apple, Microsoft, and Google… and what I’ve found is truly shocking.
It’s a secret tech revolution only 1 in 10 Americans knows is happening… and I’m convinced THIS is where we’ll find tech’s next $1 trillion winners.
Want to see how to get in on the stocks I’m betting will hit $1 trillion next? It’s all happening tomorrow during the show.
And so much more!
All you have to do is watch your inbox at 2pm EST tomorrow for an email from me when the world premiere of my event “To $1 Trillion And Beyond” airs for the first time.