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4 INFLATION & DEFLATION IDEAS FOR STOCK INVESTORS

18 August 2010 by Cullen Roche 1 Comment

If you’re betting on inflation or deflation you don’t have to limit yourself to just gold and bonds.  Morningstar’s Paul Larson provides 4 ideas for equity investors who are worried about inflation and deflation:

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Comments
  • kds

    The one inflation rec is an asphalt maker (VMC) with an operating loss, declining (non) earnings, declining revenue, declining margins and debt service ratio of 0, thats right, Zero. I guess you really got to be betting on inflation to take a ride on this one b/c it’s one GDP neg print away from BK. And it only pays out 2.6%. Not that that really matters but if you’re going to buy crap, at least get a couple paychecks out of it. I went on to listen to this dudes 3 deflation recommendations, he had to read them from his notes, and they where some version of a utility, a canadian pipeline, and a nat gas play i think. Whatever, been there heard that, makes sense for an allocation portion. Just probably not going to take my guidance on those from this guy.

    Be positioned for deflation- Bear flattener trade utilizing long term highly liquid, high grade credit. Check out Gundlach’s fund DBLTX

    Be prepared for (hyper)inflation- buy on dips and crashes…I’m thinking blue chips, particularly those that can pass on costs of energy, staples, etc. So oil giants, pipelines, food, water, reits, etc. And gold

    08/18/2010 at 11:04 PM