Day: September 6, 2023

Inflation Expectations

[…] We especially like DR Horton (DHI), Simon Property Group (SPG) and Apache Petroleum (APA), as ways to get our share of the profits from a very overvalued stock market. It is a stock market that is priced under the assumption that inflation will abate. Unfortunately, the government is discouraging fossil fuel production, so get ready for high oil prices for a long time. Throw in labor demanding higher wages and you get both cost-push and demand-pull inflation like what we saw in the 1970s. As inflation becomes a decade-long problem, we believe you will see growth stock price-to-earnings multiples contract over time.

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