| More Articles | Free Reports | Premium Services Congratulations! If you’re reading this, you’re not clawing over a flatscreen TV in the Best Buy parking lot… or hunched over your laptop scouting for deals on Amazon. This year, 183.4 million of us say we plan to shop in-store and online between Thanksgiving Day and Cyber Monday. According to the National Retail Federation, that’s up from last year’s record of 182 million. As an investor, I don’t care so much about the number of shoppers planning to shop during this period. But I’ll be keeping a close eye on the size of their purchases and how aggressively they hunt for bargains. As we’ll explore today, it tells us a lot about how Americans are navigating the inflation of the Biden years. More importantly, it tells us what we should expect next year, when President Trump takes office. We don’t have detailed shopping data from this year’s Black Friday to look at yet. But we can look in the diverging fortunes of two of America’s biggest retailers – Target and Walmart Diverging Fortunes Walmart’s sales are booming. Same-store sales were up by about 8% last quarter. And this year, its share price is up more than 70%. Meantime, Target is in deep trouble. Last Tuesday, after its quarterly earnings came in lower than expected, its shares plunged 21%. So far this year, its stock price is down about 12%. It’s now back to 2019 levels. Target isn’t a poorly run company. But as its CEO Brian Cornell told analysts last week, Target is dealing with “lingering softness in discretionary categories.” In plain English, that means shoppers are having to make choices. With more of their budgets eaten up by necessities, they’re spending less on TVs, kitchen blenders, clothing, and the other higher-margin items Target sells. Figures from research firm GlobalData show that 21% of Target’s sales are unplanned purchases. At least they were before inflation started to heat up. You might have walked into Target for a bottle of shampoo and left with an espresso machine because you saw it on the shelf and felt the urge to buy. These days, after the inflation crisis of the Biden years, Americans are making a lot fewer unplanned purchases. They’re focusing their limited dollars on things they need. That’s why the fates of these two stocks have diverged so much this year. Walmart gets unplanned purchases, too. But the percentage of its overall sales tends to be only about 12%. So, these unplanned purchases are only half as important to Walmart as they are to Target. Also, Walmart gets about 56% of its revenues from grocery sales compared to just 20% for Target. And as the world’s biggest retailer by revenue, it’s able to negotiate better grocery prices to offset some of the effects of inflation. But that’s not the only consumer story here. Earlier this year, Walmart said the majority of its market share gains have come from higher-income customers with salaries of more than $100,000. They feel the pinch of inflation, too. So, they’re shopping less at Target more at Walmart. It’s what I’ve been calling “Biden’s Revenge.” Trump Will Inherit Biden’s Inflation There’s a lot of jubilation right now about what the Trump term will do to reinvigorate the economy… and keep the bull market roaring on Wall Street. But Trump is inheriting Biden’s economy. And that means he’s inheriting lingering inflation. So, as you look to position your portfolio for the next four years, consider owning shares in Walmart and other companies that can thrive during inflationary cycles like the one we’re living through today. We’ve had Walmart in the model portfolio at our flagship Freeport Investor advisory since we launched The Freeport Society a year ago. Paid-up subscribers who acted on my recommendation are up 78%. Gold, Bitcoin, and real estate are great to own when inflation is high. So are stocks that thrive when inflation is high. Here’s what to look out for… Companies with a durable competitive advantages Walmart has a durable competitive advantage. Its huge global distribution network allows it to sell goods at unbeatable low prices. It’s extremely difficult for smaller firms to compete against that. Companies that are largest businesses in their industries When you run your business better than the competition, you can’t help but become the biggest. Take McDonald’s. It didn’t become America’s biggest fast-food chain because it made the best hamburgers. It became America’s biggest fast-food chain running a better business than its competitors. These are the world’s elite companies. And they’ll be around for a very long time. Companies that sell everyday products You want elite businesses that sell products we use every day. Think food, oil, soda, medicine, coffee, energy drinks, smartphones, beer, mouthwash, razor blades, and deodorant. These things don’t go out of style. Even when inflation is high. These are going to make for great investments as Trump inherits his predecessor’s inflation mess. Expand Your Horizons Beyond investing in companies like these, it’s also a good idea to embrace some shorter term trading strategies. One such example is our Freeport Alpha trading service, where we follow the smart money using our algorithm-based MoneyFlow Indicator. Another example is our Freeport Society friend and master trader Jonathan Rose’s new strategy that uses zero-day options. On Tuesday, Jonathan hosted a free trading session to show viewers why adding these kinds of trades are so important… how to do them… how to trade them profitably… and how to trade them safely. He recorded this session, and has kindly agreed to let me share it with you. I urge you to watch and learn here. Remember, our goal is to embrace our rights to liberty and the pursuit of wealth. Here’s to achieving that. | 