Where Can Folks Cut Back If Push Comes To Shove? June 12, 2022

Update

Later, 3:34 p.m. CT: Sophia needed a new soccer ball today. I dropped by Dick's Sporting Goods which had no shortage of all sizes of soccer balls. I picked the one without looking at the price. I was pleasantly surprised to find that for only $16 -- less than a sushi dinner for one -- I was going to make Sophia very, very happy.  

I have no idea what soccer balls cost these days, if this soccer ball was $8 last year and now $16 this year, that would be a 100% increase, "due to inflation." I wouldn't care a bit. To get a quality Nike ball that will thrill Sophia for $16, a purchase that I haven't made in three years, is awesome. Even if it's priced 100% more than last year.

Had it cost $24, I would have still bought it and still been thrilled. Still less than a sushi dinner for one.

See USPS stamp analogy below.

Later, 3:41 p.m. CT: quick, name the most "interesting" item not listed on the "inflation chart" below. Hint: this item is neither trivial nor inexpensive, and it's one product whose price doesn't affect sales from one week to week. By the way, that item leads me to think of another item that is not on the list. 

Later, 3:46 p.m. CT: federal and state income taxes, property taxes; automobile maintenance costs; insurance costs; maintenance costs for yachts -- all these and many other costs are not reflected below. And these costs (insurance, taxes, maintenance, etc) are essential and recurring and yet they are not included.

Original Post 

When talking about inflation, one needs to go through this chart, line by line.

Assuming it's accurate, a few comments.

First, for investors, it's an open-book test to figure out which sectors could be challenging as investment opportunities.

Second, things I don't see on the list:

• electronics (televisions, computers, cameras, streaming services)

Third, two sectors that are usually at the top of "inflation lists": medical care and college tuition are now at the bottom. There may be explanations but different explanations for each.

• the interesting thing folks never seem to consider: the US postage analogy
• so what if US postage stamps increase by 100%: no one uses US postage stamps any more
• likewise, the huge expenses -- in terms of dollars -- college tuition and medical expenses have gone up very little;
• rents have increased but one can lock in monthly rents with 15-month leases;
• "dining out" can be a very high-cost item and one most easily modified

Fourth, the "inflation list" cannot be reconciled / overlaid with investment sectors.

• for example: "gasoline" and "vehicles, new and used" are at the top of the inflation list but unlikely that "oil" and "automakers" would be seen as similarly attractive by investors;
• "semi-conductors" are spread throughout the inflation list; how does one invest?