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Comments (45)

Blue collar man! How did you sneak past me? As usual you made sense in the simplest terms. Thank you for further explaining inflation. Media throws it around like ball. More often it is used loosely as a scare tactic for ratings. But they do not know what it is. Alot of us do. And you just educated the blue collar. Again. Please come again soon. We miss you!
Thanks for your updates I love it.
However could you please try to update shortly but min monthly? Your last update is 2 months old which is eternity in current markets.
Thanks again for your precious insights.
Great article. One of the only writers I read closely bc you are not selling anything. Please keep writing.

I loaded up on beaten down tech a couple weeks ago. Dipped my feet in a month ago, then added as I saw a rise (momentum trades). I agree, tech will never go away. We just stay nimble and keep reading. ROKU, TWLO, DDOG, NOW, CRM. Pulled profits Thursday. Will enter again on the next drop. Yes there will be another drop to test the new highs.

Holding PLTR, MARA, SPWR. Interested in Bitcoin but staying nimble.

LULU fell sharply a while back. CHWY... brands people fiercely love. NKE just took a tumble. I dumped CHWY bc it hasn’t given alpha but I’m sure it will soon. LULU is good to me. Comparatively stable.

UAL and travel are a buy now and hold no-brainer. Just look at the 5 year charts! They are still so low. Grab some now folks. Travel isn’t going away. It’s all a matter of when.

Some dark horses to watch: AVIR, GBOX, ACAD, RVP.
The Social Scientist. profile picture
Sami Amin Al-Arian is a Palestinian political activist who was a computer engineering professor at University of South Florida. (Wikipedia)

I don't think that is the Mohammed Al-Arian you refer to above. You mean Mohamed Aly El-Erian. Why can't you even spell his name correctly? You laud him. So why should we take anything else that you write seriously?
@The Social Scientist. So you never make mistakes? Why not a kindly private note to let him know about the misspelling? Did that make you feel better about yourself?
The Social Scientist. profile picture
@sallybegood because I was a former academic, and I thought it to be a significant error. I can't fathom how the error could be made, given that El-Erian is so well known, and I was bothered that no other comments noticed the error.
"Don't Listen To Inflation Hawks"

Well, lets listen to 10 year bond holders then. What happened to their bond value when the 10 year interest rate went from .5% in Aug 2020 to 1.7% today? Any 10 year bond holders articulate what happened?
That's a 220% increase in interest rates in 8 months!!!!....which means the price of a $1000 bond went down to the $850 level. Math majors wade in here...there is an approximate formula to get at what happens to bond price when the interest rates go up 1.2% on a 10 years bond.

The net is....if interest rates keep increasing the chances of big losses by individuals and bond funds increases. The chance of bond market panic get "ever greater".
Why listen to inflation fears, it could never happen!
Woops....it has happened before?
Appreciate your disclaimers: nobody really knows anything, but at least you spell out your plan instead of letting people guess what it is you are saying.
The yield apocalypse like in 2018 was a buying opportunity.

In the mid and long term inflation will go back to below 2%. In the short term rise due to the economy coming back.

The impact of automation, debt and an aging demographic should not be under counted. Real wages have been stagnant as well. All a recipe for low inflation.
Apple Dan profile picture
Great article!!
alessandro molinari profile picture
inflation has been so low in recent years that it is no longer possible to live on salary. something is not right
Nice to see you back, David. Your insightful articles are always a great read. I also appreciate your frankness.
Missed you. Your personal strategies are interesting and informative and your perspective is all helpful. Thank you. —Sherrill
Glad to have you back!!
Finici profile picture
"....Sorry for the windup, but here is the finer point. Rising prices because of greater real demand are very good. That isn’t the inflation we should be afraid of. We should fear monetary inflation; that is the killer. That causes more dollars to be chasing too few goods and services...

Absolutely. I remember the late '70s early '80s when stagflation raised its very ugly head and caused just that problem envisioned by the current Fed. The oil embargo was the prime cause for this event followed by the second embargo in its own way was even more pernicious than the first - shall we say it was the Covid-19 variant of its day?? And it caused the interest spiral that tightened money supply.

Certainly there are differences, but essentially the principle is the same. Where 'we' might get in trouble is if "money" tightens causing the 'strangulation' above followed by a decline in production to meet demand.

To capture dollars, interest rates climb.... which is similar to one drinking water in the middle of the night to alleviate indigestion - it works for a while. Interest rates rising in an orderly fashion is not a problem.

Funny that we never hear about M-1 and M-2..... ?? !! It used to be an household 'go to' when Volcker was fab..... (to the tune of 'When We Was Fab')

I like your barbell approach - not unlike the demand that will be created as things return to a semblance of 'normal' . I believe that not unlike such securities as you mention - RUTH comes to mind - the 'social techs' (ROKU, ABNB, BMBL, &c &c ) and streaming services will continue to show progress - at least for the intermediate term.

Thanks for the article; I really appreciate your perspective.

Good to hear from you blue collar man. It's been too long but timely. I like your patience on the market #panic. What gloom and doom I have heard over the past weeks. Scary actually. What Jeff Brown webinared this week would wake the dead. Anyway do you think financials have run their course? How about REITS? this is a hard move for me to financials from tech. Lost. Thanks
@Lboyles0227 if you’re new to tech, try trading some of the safer techs until your feet are wet. MSFT, AAPL, CRM are good ones bc they're DOWs. This is a good strategy for anyone shifting sectors.
JOHNDAN09 profile picture
David. I know you don't comment on replies and I am not sure you even read them but as was said hundreds of times, I look forward to your posts. They are always informative and very often accurate. Thanks for all of your work.
Wantingtotravelagain profile picture
One can not argue that we currently have asset inflation...It is through the roof (housing, commodities, alternative assets such as Bitcoin, sports trading carts, art, etc) and likely to get worse as the system is loaded with cash with yet more cash to come and rates are still historically low...In solving one issue they have created another which history will show was a big mistake in the not too distant future (unfortunately)...Focusing on just those who have suffered during this self-imposed employment crisis fails to acknowledge that the majority never lost jobs. Something needed to be done at that time due to the ill-conceived approach that was taken but it should never have been done in the manner which they chose and continue to take...it has created too many imbalances which time will undoubtedly uncover.
"So, no, we don’t yet have too many dollars being printed right now."

Then why not print infinity money? Let's at least print more, you seem to be so keen on the idea and that it isn't hurting us.

Cmon buddy, go full MMT
Homeboy-------where have you been?? Always enjoy reading your articles on Seeking Alpha!!!
Thanks for the sobering and insightful article. Your thoughts are always welcome.
I think Al Arian knows what he is talking about. Current monetary policy is wacked.
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