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Inflation? What Inflation?


An explosive savings rate does not an inflationary scenario make.


Greetings from New York, where I got stopped out of Wells Fargo (WFC) and feel not the least bit bad about it. Protected a slightly larger than wee gain, didn't catch the top (but never try to anyway - it's as much of a mug's game as catching the bottom).

And, on the upside, Ford (F) is behaving like a champion, and hasn't even threatened the stop levels I've put on it. The risk of stops: You catch the lows of the day if/ when we gap lower. The benefits: It takes choice and gut feelings out of the trading process.

Here's what I'm watching, when I'm not doing a roughly infinite number of other things:

  • Because I'm a shameless opportunist and don't believe in human-caused global warming, I wanted an SUV. I satisfied my inner sadist and bargain-hunter by building cars online, then sending them to the dealerships. Ford offered me their hybrid SUV at $20,000 more than listed and took 3 days to do it. Buick has yet to bother to respond; it's seemingly holding out for an offer of $70 billion in exchange for... nothing. Hummer, on the other hand, got back to me the next day and struck a deal for more than 30% below MSRP. Sold to the Chinese muscle car!

  • The point of my story: It remains a great time to buy higher-end goods - low prices, no crowds. By extension, calling hyperinflation "on its way" is akin to calling Godot "late." We should be so lucky as to have inflation. We're desperate for inflation. Instead, we have explosive savings rates. People are saving and earning 0% rather than buying anything. That's simply not hyper, in any sense.

  • Another point: Look for investing ideas everywhere. Been to a Best Buy (BBY) lately? It's not the same store I remember - not by a long shot. I remembered it as a great retailer. Not any more.

  • I'm a fan of reasonable levels of pandering when I shop, but that has nothing to do with investment research as a consumer. Saks (SKS) is not Macy's (M), which is not Target (TGT). If you get Target or Macy's service at Saks, and you generally do these days, it says very bad things about Saks. So Ford being sold out delighted me as a Ford shareholder.

    The fact that non-Hummer versions of GM (GRM) desperately needed my sale but were too inept to so much as return a phone call was sadly not at all surprising. Hummer making no bones about grovelling for my purchase made me feel good and got me a good deal. Taking one-third off the price made me sanguine despite now having to get my Hummer serviced in Macau.

  • Excited about Cisco (CSCO) getting into the Dow. Consider: Microsoft (MSFT), Intel (INTC), AT&T (T), the entire DJIA class of 1999 is down more than 50% since entry. Most surprising: 2008 entrant Bank of America (BAC) is down most of all, having lost 65% since entering the DJIA. Just say no, John Chambers.

  • With that, I'm off to pick up a wildly-impractical-but-darn-cool Hummer. It'll be ready to go as soon as the mirrored naked ladies are affixed to the mud flaps.
Position in F, TGT

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