Transitory Inflation or Tough Times Ahead?

Transitory Inflation or Tough Times Ahead?

Posted On May 10, 2021 2:51 pm

Last Thursday I mentioned a quote from BoA that predicted “transitory hyper-inflation.”  Friday I followed up with a few more details.

That got a lot of attention from you and your fellow readers, so I thought I would take a closer look at the inflationary trends we are facing, and how we might profit from them.

Remember, no matter what is happening in the economy, someone is making money.  That can be you if you have the right experience and research…

The kind of research I provide in my Options360 Concierge Trading Service. (you can take a test drive for just $19)

If we are just looking at price increases in lumber (375% between April 2020 and April 2021), drywall prices (approximately 100% since early 2020), copper (up 35% this year), and Oil (up 34% YTD)…

There appears to be a hyperinflation starting.  

However, the real test will be if we see wages increase – as I mentioned in Friday’s email. It seems like we might be seeing wages increase as more and more employers fight over the few people willing to go back to work.  

I think the government has forgotten that paying people to stay home isn’t a great way to encourage them to get back to work.  Especially when you are paying them the same amount of money they would make at a job.  Or more than they would make!

I suspect that we are going to see some tough times ahead for the economy, however, no one is building the Thunderdome.  

And there will be loads of opportunities if I am right.  If I’m wrong even better….

We stay in this bull market and ride the wave.  

My point is there is no reason to be worried, there is every reason to be prepared.  

Right now we are still in a bull market, so we trade the bull market until and unless it tells us differently.  

Stock selection is vitally important, and it’s even more important than ever not to have any naked positions.  

So the short game is to play some of the cyclical stocks that benefit from commodities inflation.

In the meantime, we need to have a long-term plan that will benefit from a bearish move that wage inflation may bring about.

In short, ride the bull and be wary of the bear.  

In Options360 we continue to look at short-term positions and keep the trades on a tight leash. 

I feel confident that we are going to do extremely well in Options360.  You’re welcome to experience why I am so confident, just click here and grab your $19 trial subscription.

To Your Success,


About author

Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.