Do you have hops? - Price Hops

I am sitting back, watching a basketball game and I would never ask Kobe Bryant this question..."Hey man you got hops?" Because he and anyone within 100 feet would probably come running up to me, smack me, and then ask why the hell I would ask a dumb question like that. Of course Kobe has hops, he can jump out of the gym!

Well that is not the only thing that has hops lately. For example, most of the things people buy on a daily basis have experienced a term I call "Price Hops". That means that the price has been skyrocketing, off the chain, through the roof, or flat out way too expensive. Take a few basic staples - cheese, milk, eggs, bread, and gas and you tell me that when you go shopping or driving that the you are pulling out more cash. I call it "Price Hops", but you might here the market call it INFLATION.

This definition was provided by Investorwords.com:

Inflation - The overall general upward price movement of goods and services in an economy, usually as measured by the Consumer Price Index and the Producer Price Index. Over time, as the cost of goods and services increase, the value of a dollar is going to fall because a person won't be able to purchase as much with that dollar as he/she previously could.
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Urbanomics Constant Reminder: Don’t dismiss the facts that are in front of you (trust yourself)

I came up with a term called "Price Hops" and its no wonder that the price of the things that you are buying on a regular basic are costing you more. Inflation is on the rise and market is taking notice by watching the Producer Price Index. And even if you take food and gas out of the measurement, the index would still rise.

Some of the factors affecting inflation:

The price of oil keeps rising - Upcoming inventory data and weather are big factors

The demand of steel, copper, wheat (commodities) is rising (Wheat is at an time high)

The prices of things America imports are up roughly 13% (highest levels since the 80s)


How to profit during a tough economic period (follow the industry buzz):

Buy Large Cap companies, especially Multinational Companies
Buy the Commodities that keep rising - precious metals, mining, wheat, oil
Buy the Equipment Maker of agriculture and oil refiners
Buy the stuff people buzz about even in tough times

I know you want names:
- AK Steel (NYSE: AKS) - great play on the rise in steel
- Celanese (NYSE: CE) - roughly 2/3 of sales come from outside of US
- Use Exchange Traded Funds (ETFs) - JJN, USO, GAZ (examples of funds for nickel, gas, oil, gold, steel)
- Buzz items - No matter how tough the economy is people can't do with those darn flat tv's, dvd's and entertainment programs; I picked up on Zacks.com momentum picks...and for two days in a row they recommended Liquid Crystal Display providers:
AU Optronics (AUO)
Corning (GLW)
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URB UPDATE: The beauty of DOLLAR COST AVERAGING pays off and Avid Technology (recent rise allowed me to recoup all of my loss and I sold my entire position to break even. (More to come on how we turned a bad stock into one that didn't hurt us)
Disclsoure: I sold AVID