Inflation Run Amok

“Much have I suffered, labored long and hard by now
in the waves and wars. Add this to the total—bring the trial on!”

— Odysseus, by some guy known as Homer

 

Addison WigginDear Reader,

“Buy when everyone is in pain,” says Marin Katusa on this week’s Wiggin Session. “And sell when they are cocky at the cocktail party.”

A finger to the pulse then, today.

Yesterday we said that things will get ugly in the coming months. The average consumer seems to think the same.

This is the University of Michigan’s chart on consumer sentiment:

Current Financial vs a year ago

What we’re looking at is a clear downtrend from around this time last year. Our analysis tells us the average consumer is beginning to allocate their finances selectively, readying for defensive positioning.

Buckling up.

Ultimately, it is the rise in the cost of living (i.e. inflation) that is fueling the average consumer’s misgivings.

COVID is out the window, though Biden would beg to differ.

Inflation runs amok, and the Fed is playing catch up. No economic muse to save Powell. (Amok, by the way, I just learned this week, is a Malay word.)

Consumer spending accounts for roughly 65% of the United States’ total GDP. If we are to trust the average consumer’s psychology, all signs point to the r-word. Katusa defined it quite curtly, here.

Spending on cruises and international travel is the first to go.

So why is Larry Fink saying “Go on vacation!” to Mad Money’s Jim Cramer on CNBC?

Maybe because that’s what we all ought to do before October rolls around and the holiday’s slam us. Before it really gets bad.

Katusa again: “Do your homework. And you keep buying, like an alligator.”

We ain’t seen nothing yet.

So it goes,

Addison Wiggin

Addison Wiggin
Founder, Financial Reserve

P.S. Chris Daigle, a doer-not-sayer and long-time friend of mine in the finpub industry said this about our Session this week. “I love Marin Katusa’s investment philosophy… thanks for having him on your channel, Addison 👍🏼.”

Thanks for watching, Dr. Daigle.

Now, let’s look at everything our team recommended this week…

Monday

There were no new recommendations on Monday.

Tuesday

In The Profit Wire, Dave Gonigam and Alan Knuckman recommend buying shares of Teladoc Health Inc. (TDOC) up to $42. For a more speculative trade, buy TDOC Oct. 21, 2022, $35 calls up to $12.

In a new market analysis for Real Estate Trend Alert, Ronan McMahon introduces “The Village: $36,500 in Annual Income and 5-Star Luxury.”

Wednesday

In The Profit Wire, Dave and Alan recommend selling all of your shares of Affirm Holdings Inc. (AFRM) at market for a 43% gain. Also sell all of your AFRM Sept. 16, 2022, $17.50 calls for $11.80 or better to collect a 100% gain.

Thursday

In Jim Rickards’ Countdown to Crisis, Dan recommends buying J.B. Hunt Transportation Services Inc. (JBHT) Sept. 16, 2022, $165 puts up to $6.50.

In the Jim Rickards’ Strategic Intelligence PRO Crisis Survival Insider, Jim introduces “Better Survival Methods Through the Four R’s.”

In Ray Blanco’s Catalyst Trader, Ray recommends selling your SPDR S&P Biotech ETF (XBI) Sept. 16, 2022, $68 calls for a 97% gain.

Friday

In Jim Rickards’ Gold Speculator with Dan Amoss, Dan recommends buying shares of Ascot Resources (AOTVF) up to $0.35. Make it no more than 5% of your speculative gold portfolio.

In The Profit Wire, Dave and Alan recommend selling all of your Starbucks Corp. (SBUX) shares at market for a 14% gain and your remaining SBUX Sept. 16, 2022, $70 calls for $15.10 or better to collect a 100% gain.

Addison Wiggin

Addison Wiggin

Addison Wiggin is founder and executive publisher of Agora Financial LLC, an independent economic forecasting and financial research firm. He and Bill Bonner began writing the firm’s flagship Daily Reckoning in the midst of the tech boom and bust. It was one of the first widely distributed email newsletters on the Internet. The publication’s critical eye on finance and economics continues today. He’s also creator and editorial director of Agora Financial’s daily missive The 5 Min. Forecast.

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