Update - August 9, 2022
Inflation Isn’t Going Away
There are two leading causes of inflation. I am going to quickly show you what to do about both.
A leading cause of rising prices, of course, is the cost of energy.
It’s no surprise, then, that Washington’s oh-so-fresh “Inflation Reduction Act” earmarks more than $350 billion for the sector over the next few years.
The aim, of course, is to lower the price of alternative forms of energy.
It’s a big effort, and we’ve seen it coming.
That’s why, in the August issue (released just last week), I recommended you buy shares of a little-discussed energy infrastructure leader… Quanta Services (PWR).
Its shares are rising as Wall Street digests the big vote in Washington over the weekend. With billions of taxpayer dollars allocated to building out the necessary infrastructure for alternative forms of energy, Quanta will do very well in the months ahead.
The company’s earnings report last week hints at what’s ahead.
Quanta earned $1.54 per share… more than the $1.51 per share analysts had expected. Better yet, it upped its full-year sales guidance to a range of $16.6 billion to $17 billion, versus the prior projection of $16.2 billion to $16.7 billion.
Profits are expected to rise by a similar margin.
The company’s CEO had good things to say…
“We are seeing growing demand for our renewable generation and infrastructure solutions in 2023 and beyond, giving us continued confidence in our multiyear financial targets.”
If you haven’t gotten your shares of Quanta yet, get them now.
There are many reasons they are likely to surge from here. I outlined some of them in the August issue.
Paying for It
Many pundits are pushing back on Washington’s latest legislation, saying the caps it puts on pharmaceutical prices will ultimately harm Americans. It’ll mean less innovation and less competition in a space that was once the envy of the world.
I haven’t talked to Joel about it yet… but I think we all know what the Salatin take on the news will be.
The world’s most famous farmer and Manward reader favorite has long been focused on the shifting costs of food and healthcare.
Joel is quick to point out that in the 1970s, household spending on food was 17% of income. At the same time, healthcare spending was just 9% of income.
But that trend has reversed… wildly.
Today, consumers spend just 9% of their money on food and close to 20% of it on healthcare.
“There’s probably a relationship between cheap food and higher health costs, versus high-quality food and not being sick,” he says.
Today, food costs are rising quickly, yet the nutritional quality of our food continues to fall.
It’s perhaps the most dangerous form of inflation. We pay more and get less.
“You would have to eat 7 pounds of broccoli today to get the same nutrition as 1 pound of broccoli in 1930.”
“Sugar is cheap, protein is expensive,” Joel says. “The obesity epidemic follows the cheap-food policy, because candy bars are cheaper than pork chops.”
That’s trouble, especially as it looks like food inflation has no end in sight.
Just yesterday, in fact, Tyson Foods (TSN) – which is not in our portfolio – saw its shares plunge by close to 10% because rising prices continue to pressure its margins and curb buyer demand.
It’s a dangerous trend.
As prices go up, nutritional input goes down.
Again, this is a trend we’ve been watching for a long time. One of the first-ever issues of Manward Letter focused on the waning nutritional value of our food.
It’s one of the main reasons I courted Joel to write for us. His views and ideas should be considered a national treasure.
It’s also why I am so excited to bring Manward readers to his farm in September… almost exactly a month from today.
We’ll hear from Joel, we’ll see his operation and we’ll get a true, unvarnished look at what’s gone wrong… and what we can do about it.
We’ll even hear from a doctor who was on her deathbed… but turned her health around simply by ditching the modern food system.
It’ll be an incredible event.
But this is your last chance to sign up.
We need to finalize our head count and lock in all of our giveaways. So if you want to attend, you must RSVP right away.
I hope to see you there.