What will happen once government monetary stimulus ends and inflation starts to kick in?

That’s the big concern that many analysts have.

We already have a glimpse of what the future might look like.

In China, the CSI 300 Index slid 15% since reaching a 13-month high last month. Yet the US is back to a massive programme, issuing cheques of up to $1,400 for most citizens under Biden’s ‘American Rescue Plan’.

Here in New Zealand, the situation has become even more complex. To cope with a runaway housing market, the government is removing the ability for investors to claim mortgage interest.

In a country as leveraged as this in housing, there are wider threats. We are now seeing a much weaker NZD. Making it harder to invest in global assets.

Where are growth prospects, decent income yield, and margin of safety?

We’ve had some stellar returns from:

  • Property recovery.
  • New trend automotive and semiconductors.
  • Housing market surge. 
  • Travel recovery.

Where is the puck going next?

We are now looking for new sources of risk-adjusted return. In particular, areas for growth could be entertainment, media, travel, consumer staples (food), and energy.

One phrase that sticks in my mind comes from Warren Buffett’s love of the Coca-Cola Company [NYSE:KO].

‘I’m the kind of guy who likes to bet on sure things,’ said Buffett, who served on Coke’s board of directors for 17 years. ‘No business has ever failed with happy customers… and you’re selling happiness.’

While the Coke business has recovered from coronavirus, there are new fears as to whether it can continue to grow its revenues in a more health-conscious sugar-cursing age.

But there is another business that sells happiness that I like even more.

It is actually a business Buffett sold out of in the 1960s for a 50% profit. It has gone on to do much more.

Today, we’re adding this new business with incredible post-Covid potential to our Watch List…

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