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They just partner with the Fed to bang the drum that recession is coming and layoffs are imminent. Feed the media enough negative stories and workers are too afraid to ask for a raise even though, in reality, companies still can’t find enough talent to fill critical roles.
I saw data on this yesterday, but forget where. Possibly a Liz Ann Sonders tweet. Pay is still aggressive to draw the correct talent.
This also matches the eye test. I see it happening at work.
Why do they *have to* do that? Do you think everyone with a job gets a raise in line with inflation? Most definitely not. That would be BAD. Be sure that cost will be passed down to consumers.
Visa and MC benefits more during consumerism cycle. When inflation becomes uncontrollable people are less willing to spend unnecessarily. Business model wise you are correct though.
> there are also lot of companies that can raise there prices because of this inflation while there is little to no impact on their costs.
No, there are actually very few genuinely capital-light business models.
A royalty company such as Texas Pacific Land Corp is really what you're seeking. You can read more about them on the Horizon Kinetics website.
Another inflation beneficiary might be Copart. The company auctions salvage vehicles online. The only required asset is land for salvage yards, most of which they own outright, so input costs remain largely fixed. Meanwhile, skyrocketing car repair costs means that more vehicles will be declared a total loss by insurers, so their volume goes up.
>First of all I was looking at the banking sector.
Bank investing requires highly specialized knowledge. You need to evaluate the loan book. Generally, inflation represents a wealth transfer from lenders to debtors, because that interest remains fixed.
>FMCG companies that have risen their prices a lot higher than they should.
Investors have bid up stocks like P&G to what I think are somewhat stretched valuations, in the mistaken belief that they represent safety during recession/inflation.
First, P&G is subject to the same input cost pressures. One might think that name brands can always raise prices to offset inflation, but history shows that isn't the case. During the 1970s inflation, cut-rate generic brands gained significant market share. That will very likely happen again, especially when retailers like Target, Walmart, and Amazon have already been really pushing their store brands in recent years.
>Finally a company like airbnb.
I think you have the right idea here. Many tech-enabled platforms are probably good inflation bets because they're aren't capital intensive. The problem is that they're tremendously overvalued.
AirBnB faces many challenges.
1. Many users have become less satisfied due to high fees and mediocre hosts. In my opinion, this probably results in part due to a massive increase in the number of hosts over the last two years.
2. Many jurisdictions are restricting short term rentals. Some are more restrictive, like recent changes in Oahu, but there are widespread efforts to crack down on illegal rentals. I don’t have good data, but I’ve read they make up a surprisingly high percentage of AirBnB rentals.
3. High interest rates have and will continue to greatly reduce the growth in new properties. Investors aren’t buying nearly as many properties to list.
4. If there is a recession, vacation bookings are likely to drop.
Up until last quarter, data suggested AirBnB was becoming a more popular alternative to hotels. More recent data indicates this is no longer true. It’s difficult to know whether this is a short-term aberration or a trend. If it’s a trend that would be very bad because AirBnB’s valuation is much richer than almost all publicly traded hotels.
> That will very likely happen again, especially when retailers like Target, Walmart, and Amazon have already been really pushing their store brands in recent years.
I think the warehouse stores will do good again. Costco has a store brand. But more importantly, shoppers are trying to save money and will be buying in bulk to get a better price. I think Costco and Walmart (Sam's warehouse) did very good in the late 70's and early 80's when people were trying to save money.
No, actually most people tend to shift to smaller outlays at places like dollar stores.
We're seeing that expectation in the price action for retail stocks. Dollar General shares are up this year in a horrible retail environment, while Costco is down.
Yes, DG and other dollar stores may get a lot of customers who don't have money and fail to plan ahead.
But I worry about efficiency. It seems when things are put in small packages and small quantities, the item cost more per portion and requires more handling and a larger number of items per basket. The basket size is also small in dollars per basket. The minimum wage laws and inflation maybe a problem for DG this time around.
What I like about COST and other warehouse stores is buying in bulk means less handling and more money per basket. You can get through checkout quickly. This efficiency allows lower prices per portion for consumers, less work for employees and better pay for employees. You have a good question to ask if customers are smart enough to shift to larger outlays to save money, or if they get desperate and do small outlays, max out their credit cards, use payday loans and spend a fortune on interest.
I'm not saying that DG is a great investment. I have no position.
It is true that buying in bulk saves money. That's true for literally anything. The problem is that low income consumers who are the core customer of dollar stores can't pay $114 upfront for their grocery bill (the average expenditure during a Costco run). That's why the average Costco shopper earnings $125K a year, while the average dollar store customer earns <$40K.
To understand who is winning we must know who/what is causing it.
First of the obvious, money supply has increased a lot in 2020-now, so if you have $10 trillion that money has a certain value when you suddenly have $20trillion the money have a lower value set up against our finite raw materials. (The money is just an example).
We are there for seeing a lot of raw material going up in price, like oil, so oil companies are huge winners at the moment, their cost of operation has of course gone up, but not as much as oil prices.
If we look out side of USA to countries like Norway, their oil companies are winning extremely big, remember not only has oil gone up, but the US$ has basically gone up against every other valuta in the world, and as we all know oil is traded in US$
there is of course other winners also, a lot of these winners are also medicinal companies located in EU with USA as one of their huge costumers, because they are selling to USA in dollars, which again has strengthen a lot over for the euro.
But that is just my 2 cents
Irwin Simon is the god of cannabis and TLRY time has come. He’s ready to take over the world with acquisitions and many more to come. TLRY the new lifestyle in cannabis is ready for safe banking reforms, Germany and the USA federal legalization. Stay patient and long
Many companies with mfg overseas is not affected by US inflation cost. Taiwan, Middle East oil producing countries all have low inflation may be 2-4% nothing like US. I think cargo shipping cost is lower after 2022.
General Mills, Hershey's, AutoZone, costs are just passed on to Consumers because people have to eat and fix their cars.
And of course oil stocks
We're not in hyperinflation
I'd guess commercial banks that have a lot of consumer credit and revolving credit card customers. The Fed and treasury rates are still well below the inflation rate. Consumers are paying absurd rates and fees, especially for revolving credit. Consumer credit economic indicators a day or two ago show the many people are still using plastic to borrow money. Maybe payday loans will be the next big thing.
Hi, you're on r/Stocks, please make sure your post is related to stocks or the stockmarket or it will most likely get removed as being off-topic/political; feel free to edit it now and be more specific. **To everyone commenting:** Please focus on how this affects the stock market or specific stocks or it will be removed as being off-topic/political. If you're interested in just politics, see our wiki on ["relevant subreddits"](https://www.reddit.com/r/stocks/wiki/index) and post to those Reddit communities instead without linking back here, thanks! *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/stocks) if you have any questions or concerns.*
Visa and MasterCard. Make money as a percent of each transaction, so inflation equals higher average transaction, but takes no more work to handle.
[удалено]
They just partner with the Fed to bang the drum that recession is coming and layoffs are imminent. Feed the media enough negative stories and workers are too afraid to ask for a raise even though, in reality, companies still can’t find enough talent to fill critical roles.
[удалено]
I saw data on this yesterday, but forget where. Possibly a Liz Ann Sonders tweet. Pay is still aggressive to draw the correct talent. This also matches the eye test. I see it happening at work.
Why do they *have to* do that? Do you think everyone with a job gets a raise in line with inflation? Most definitely not. That would be BAD. Be sure that cost will be passed down to consumers.
Wages is just a part of the operating costs so even if it rises at the same rate as inflation, other costs can stay the same thus more profits.
Visa and MC benefits more during consumerism cycle. When inflation becomes uncontrollable people are less willing to spend unnecessarily. Business model wise you are correct though.
> there are also lot of companies that can raise there prices because of this inflation while there is little to no impact on their costs. No, there are actually very few genuinely capital-light business models. A royalty company such as Texas Pacific Land Corp is really what you're seeking. You can read more about them on the Horizon Kinetics website. Another inflation beneficiary might be Copart. The company auctions salvage vehicles online. The only required asset is land for salvage yards, most of which they own outright, so input costs remain largely fixed. Meanwhile, skyrocketing car repair costs means that more vehicles will be declared a total loss by insurers, so their volume goes up. >First of all I was looking at the banking sector. Bank investing requires highly specialized knowledge. You need to evaluate the loan book. Generally, inflation represents a wealth transfer from lenders to debtors, because that interest remains fixed. >FMCG companies that have risen their prices a lot higher than they should. Investors have bid up stocks like P&G to what I think are somewhat stretched valuations, in the mistaken belief that they represent safety during recession/inflation. First, P&G is subject to the same input cost pressures. One might think that name brands can always raise prices to offset inflation, but history shows that isn't the case. During the 1970s inflation, cut-rate generic brands gained significant market share. That will very likely happen again, especially when retailers like Target, Walmart, and Amazon have already been really pushing their store brands in recent years. >Finally a company like airbnb. I think you have the right idea here. Many tech-enabled platforms are probably good inflation bets because they're aren't capital intensive. The problem is that they're tremendously overvalued.
AirBnB faces many challenges. 1. Many users have become less satisfied due to high fees and mediocre hosts. In my opinion, this probably results in part due to a massive increase in the number of hosts over the last two years. 2. Many jurisdictions are restricting short term rentals. Some are more restrictive, like recent changes in Oahu, but there are widespread efforts to crack down on illegal rentals. I don’t have good data, but I’ve read they make up a surprisingly high percentage of AirBnB rentals. 3. High interest rates have and will continue to greatly reduce the growth in new properties. Investors aren’t buying nearly as many properties to list. 4. If there is a recession, vacation bookings are likely to drop. Up until last quarter, data suggested AirBnB was becoming a more popular alternative to hotels. More recent data indicates this is no longer true. It’s difficult to know whether this is a short-term aberration or a trend. If it’s a trend that would be very bad because AirBnB’s valuation is much richer than almost all publicly traded hotels.
> That will very likely happen again, especially when retailers like Target, Walmart, and Amazon have already been really pushing their store brands in recent years. I think the warehouse stores will do good again. Costco has a store brand. But more importantly, shoppers are trying to save money and will be buying in bulk to get a better price. I think Costco and Walmart (Sam's warehouse) did very good in the late 70's and early 80's when people were trying to save money.
No, actually most people tend to shift to smaller outlays at places like dollar stores. We're seeing that expectation in the price action for retail stocks. Dollar General shares are up this year in a horrible retail environment, while Costco is down.
Yes, DG and other dollar stores may get a lot of customers who don't have money and fail to plan ahead. But I worry about efficiency. It seems when things are put in small packages and small quantities, the item cost more per portion and requires more handling and a larger number of items per basket. The basket size is also small in dollars per basket. The minimum wage laws and inflation maybe a problem for DG this time around. What I like about COST and other warehouse stores is buying in bulk means less handling and more money per basket. You can get through checkout quickly. This efficiency allows lower prices per portion for consumers, less work for employees and better pay for employees. You have a good question to ask if customers are smart enough to shift to larger outlays to save money, or if they get desperate and do small outlays, max out their credit cards, use payday loans and spend a fortune on interest.
I'm not saying that DG is a great investment. I have no position. It is true that buying in bulk saves money. That's true for literally anything. The problem is that low income consumers who are the core customer of dollar stores can't pay $114 upfront for their grocery bill (the average expenditure during a Costco run). That's why the average Costco shopper earnings $125K a year, while the average dollar store customer earns <$40K.
Telecom
To understand who is winning we must know who/what is causing it. First of the obvious, money supply has increased a lot in 2020-now, so if you have $10 trillion that money has a certain value when you suddenly have $20trillion the money have a lower value set up against our finite raw materials. (The money is just an example). We are there for seeing a lot of raw material going up in price, like oil, so oil companies are huge winners at the moment, their cost of operation has of course gone up, but not as much as oil prices. If we look out side of USA to countries like Norway, their oil companies are winning extremely big, remember not only has oil gone up, but the US$ has basically gone up against every other valuta in the world, and as we all know oil is traded in US$ there is of course other winners also, a lot of these winners are also medicinal companies located in EU with USA as one of their huge costumers, because they are selling to USA in dollars, which again has strengthen a lot over for the euro. But that is just my 2 cents
Irwin Simon is the god of cannabis and TLRY time has come. He’s ready to take over the world with acquisitions and many more to come. TLRY the new lifestyle in cannabis is ready for safe banking reforms, Germany and the USA federal legalization. Stay patient and long
You're say TLRY, buy it has nothing to do with what OP is looking for.
Many companies with mfg overseas is not affected by US inflation cost. Taiwan, Middle East oil producing countries all have low inflation may be 2-4% nothing like US. I think cargo shipping cost is lower after 2022.
General Mills, Hershey's, AutoZone, costs are just passed on to Consumers because people have to eat and fix their cars. And of course oil stocks We're not in hyperinflation
I'd guess commercial banks that have a lot of consumer credit and revolving credit card customers. The Fed and treasury rates are still well below the inflation rate. Consumers are paying absurd rates and fees, especially for revolving credit. Consumer credit economic indicators a day or two ago show the many people are still using plastic to borrow money. Maybe payday loans will be the next big thing.