Investors worried about the mounting inflation pressures should consider the energy sector, according to top portfolio managers during TheStreet's webinar How to Play the Inflation Trade.
"My focus, really, right now is on solar," says Bob Lang, Action Alerts PLUS co-portfolio manager. Lang joined an all-star panel of experts including:
- David Schassler, portfolio manager of the Inflation Allocation ETF, RAAX, at VanEck
- Nancy Davis, founder and CIO of Quadratic Capital Management
- Bob Lang, Action Alerts Portfolio Manager
TheStreet Recommends: 4 Reasons Why Transitory Inflation Is Unlikely
Inflation News Update (Dec. 16, 2021)
- Federal Reserve Chairman Jerome Powell confirmed the most hawkish turn of his four-year term
- The Federal Reserve will accelerate its tapering of monetary stimulus
- The Federal Reserve may also set the stage for three potential rate hikes
Susan McGinnis Bob, tell us about the green transition. Anything you have there that you think is worth noting?
Bob Lang: Yeah, some of these electronic EV companies have been very, very popular, very strong. My focus, really, right now is on solar. And a couple of names that we've been playing around with are First Solar ( (FSLR) - Get First Solar, Inc. Report), which is a name that's been around for quite a while. SunPower, SPWR ... (Another company) is Tesla ( (TSLA) - Get Tesla Inc Report). Tesla owns SolarCity.
So, a couple of these companies are primed and ready for the investments that the government wants to make in green environment. So I think solar is a no-brainer. I think wind energy is also a no-brainer. But some of these fossil fuel companies are still not making those investments there that would say that we're going to go away from fossil fuel and oil to move into a new direction.
Lang: So I like the wind. I like solar. Hydrogen, as well, too. But the area that seems to be hot right now is solar. And I think that that's the area that is going to get the bulk share of investment dollars over the next 10 years.
McGinnis: So that energy transition, as well as automotive, David, would probably spike a handful of metals. Like what?
David Schassler: Exactly. So when you look at EVs versus traditional vehicles, they take around five times as much metals to make them. So you have this big transition where we're underinvesting in traditional energy. And to get there we've got to have more demand for metals.
So we're in the middle of this major, massive transformation that's going to take an extended period of time to get there. And it's causing mismatches in supply and demand. So we think that these add to the inflationary fires, and they're only going to do so for an extended period of time.
Energy stocks to watch was just one of the topics discussed during TheStreet's How to Play the Inflation Trade, hosted by Susan McGinnis.
WATCH: How to Play the Inflation Trade, a FREE webinar, hosted by Susan McGinnis.
Editor’s note. The webinar was recorded on October 28, 2021.
Video Highlights | How to Play the Inflation Trade
- 00:06:30 Can the Federal Reserve stop inflation?
- 00:10:40 Stocks to benefit in an inflationary environment
- 00:11:20 Inflation-hedging equities with strong yields
- 00:12:30 Key moves to inflation-proof your portfolio
- 00:21:30 What history tells investors about inflation
- 00:23:00 Inflation Allocation ETF, RAAX
- 00:30:20 Companies investing in the green transition
- 00:31:30 Why investors should consider the energy sector