Monday
Nov152010
Marketplaces and Inflation
Monday, November 15, 2010 at 11:15AMWritten by Michael Bigger. Follow me on Twitter and StockTwits.
Inflation has been in the news quite a bit lately. On Sunday, Howard Lindzon posted a great piece about printing money titled Printing Money…I Mean Quantitative Easing. The video embedded in his post is hilarious but alarmingly Right On!
This piece got me thinking one more time about what else other than the traditional vehicles (agricultural products, gold, silver, etc) could benefit from inflation.
Here is an idea…
Businesses that could thrive during a period of high inflation are the hard-good online marketplaces such as Amazon, Craigslist, eBay, and others. The reasons supporting their potential success are as follows:
1. Traditional retailers will have a tougher time managing price increases compared to their agile technology-skilled competitors.
2. As the prices of hard goods and the volatility of the market increase, activity on the online exchanges should increase.
3. Arbitrage opportunities will abound on the online space to the benefit of the marketplaces’ owners.
4. Online supplies of used merchandise should increase as prices increase, as sellers trade hard goods for hard goods.
Google Search might also benefit as a hard-good and price-discovery tool.
eBay is really interesting right now because its stock is reasonably valued and its marketplace is heaven for value shoppers. Inflation could unleash a powerful catalyst for this company.
What do you think?
This piece got me thinking one more time about what else other than the traditional vehicles (agricultural products, gold, silver, etc) could benefit from inflation.
Here is an idea…
Businesses that could thrive during a period of high inflation are the hard-good online marketplaces such as Amazon, Craigslist, eBay, and others. The reasons supporting their potential success are as follows:
1. Traditional retailers will have a tougher time managing price increases compared to their agile technology-skilled competitors.
2. As the prices of hard goods and the volatility of the market increase, activity on the online exchanges should increase.
3. Arbitrage opportunities will abound on the online space to the benefit of the marketplaces’ owners.
4. Online supplies of used merchandise should increase as prices increase, as sellers trade hard goods for hard goods.
Google Search might also benefit as a hard-good and price-discovery tool.
eBay is really interesting right now because its stock is reasonably valued and its marketplace is heaven for value shoppers. Inflation could unleash a powerful catalyst for this company.
What do you think?
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