So what do you do if your worldview is that we are going to have a booming economy with ultimately tamer inflation, post the decline in unemployment benefits, which is October, and possibly a slower economy a year from now? Especially because I think the Fed will have to raise rates, end of the year or maybe next year. If inflation holds, you know, peaks, then Jay Powell isn’t going to do anything. He's going to prove a lot of people wrong.
So now: Why you buy growth stocks -- but growth stocks that are secular. The situation is set up you got to buy growth stocks that are secular in nature with some cyclical aspects. ... They give you a booster during the reopening now but won't have a down year in 2022, nine months from now, because of the secular stream. It doesn't need a strong economy to beat numbers.
You can also buy the stocks of companies that could have up 2022s, simply because they are less cyclical businesses that aren't going to be left too far behind by, say, the travel-and-leisure companies that are almost at this point too obvious. Think Southwest Air (LUV) - Get Report, which you know I like.
But you have to steer clear, no matter what, of both anything that's valued too highly, again because of inflation and because in what is perhaps the toughest wrinkle, the stay-at-home, work-from-home stocks, in my worldview, are finished. Finished. And we can see that on my screen right now. We'll get to one that people think is that for us -- it’s killing me.
All right, finally, finally, you have to think about what could derail your worldview. Remember I said that you have to think out to left field. What do you mean? Left field is still in the stadium. What do you see that could upset things and make you recalibrate?
For me, I'm particularly concerned about the Chinese making a move on Taiwan. We're squeezing their critical companies to the de facto takeover of Taiwan Semi (TSM) - Get Report. I don't want inflation to be so raging that Jay Powell can't engineer a soft landing. And I don't want the economy to fall off a cliff because I won't have enough Cathie Wood Stocks, as I call them, to help make you enough money. She's got the fall-off-the-cliff stocks. That's the nature of the beast.
So I put our stocks through the worldview. I was going to say, every day that -- pretty much every hour, when I wake up and when I go to bed, I study the list that we have, the recommended list, to see if I violated my worldview or to see if something can be added because it's fallen so hard, so fast that you have a chance to get it in, provided again it fits the worldview.